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Session 2006 - 07
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General Committee Debates



Draft Budget (Northern Ireland) Order 2007



The Committee consisted of the following Members:

Chairman: Dr. William McCrea
Anderson, Mr. David (Blaydon) (Lab)
Bailey, Mr. Adrian (West Bromwich, West) (Lab/Co-op)
Battle, John (Leeds, West) (Lab)
Campbell, Mr. Gregory (East Londonderry) (DUP)
Cooper, Rosie (West Lancashire) (Lab)
Creagh, Mary (Wakefield) (Lab)
Davies, Mr. Quentin (Grantham and Stamford) (Con)
Devine, Mr. Jim (Livingston) (Lab)
Dodds, Mr. Nigel (Belfast, North) (DUP)
Donaldson, Mr. Jeffrey M. (Lagan Valley) (DUP)
Durkan, Mark (Foyle) (SDLP)
Foster, Mr. Michael (Worcester) (Lab)
Harris, Mr. Tom (Parliamentary Under-Secretary of State for Transport)
Hepburn, Mr. Stephen (Jarrow) (Lab)
Hermon, Lady (North Down) (UUP)
Joyce, Mr. Eric (Falkirk) (Lab)
Lancaster, Mr. Mark (North-East Milton Keynes) (Con)
Lidington, Mr. David (Aylesbury) (Con)
Mackay, Mr. Andrew (Bracknell) (Con)
McDonnell, Dr. Alasdair (Belfast, South) (SDLP)
McGrady, Mr. Eddie (South Down) (SDLP)
Mulholland, Greg (Leeds, North-West) (LD)
Norris, Dan (Wansdyke) (Lab)
Öpik, Lembit (Montgomeryshire) (LD)
Paisley, Rev. Ian (North Antrim) (DUP)
Pound, Stephen (Ealing, North) (Lab)
Reid, Mr. Alan (Argyll and Bute) (LD)
Robertson, Mr. Laurence (Tewkesbury) (Con)
Robinson, Mrs. Iris (Strangford) (DUP)
Robinson, Mr. Peter (Belfast, East) (DUP)
Rosindell, Andrew (Romford) (Con)
Ruane, Chris (Vale of Clwyd) (Lab)
Simpson, David (Upper Bann) (DUP)
Wallace, Mr. Ben (Lancaster and Wyre) (Con)
Walter, Mr. Robert (North Dorset) (Con)
Waltho, Lynda (Stourbridge) (Lab)
Wilson, Sammy (East Antrim) (DUP)
Alan Sandall, David Weir, Committee Clerks
† attended the Committee
The following also attended, pursuant to Standing Order No. 109(4):
Cairns, David (Parliamentary Under-Secretary of State for Scotland)
Eagle, Maria (Parliamentary Under-Secretary of State for Northern Ireland)
Hanson, Mr. David (Minister of State, Northern Ireland Office)

Northern Ireland Grand Committee

Tuesday 27 February 2007

[Dr. William McCrea in the Chair]

Oral Answers to Questions

The Secretary of State was asked—

Intensive Care (Children)

4 pm
1. Mrs. Iris Robinson (Strangford) (DUP): What recent improvements have been made to intensive care provision for babies in the Province. [122573]
The Minister of State, Northern Ireland Office (Mr. David Hanson): A new intensive care cot was introduced in 2006 and funding has been identified for another cot and paediatric intensive care bed in 2007. A neonatal and paediatric critical care transport service and managed clinical network are being put in place, as well as other system improvements.
Mrs. Robinson: I thank the Minister for his answer, and welcome the additional intensive care cot for babies suffering serious illnesses at birth, or premature birth. What consideration has been given to providing extra neonatal cots in hospitals in the Province?
Mr. Hanson: I thank the hon. Lady for her question. She will be aware that an additional £800,000 has been allocated for neonatal and paediatric intensive care services in 2007-08—next year. It is important to try to improve the level of service and provision.
One difficulty for the Under-Secretary of State for Northern Ireland, my hon. Friend the Member for Wythenshawe and Sale, East (Paul Goggins) in managing those services is that demand often fluctuates. Average capacity is currently less than available bed facility. We have increased the number of beds and we want that to continue. We will monitor the situation, because I do not want additional capacity with insufficient beds. The challenge is to monitor capacity and reflect that in the public purse to manage that capacity.
Lady Hermon (North Down) (UUP): Will the Minister kindly give the Committee an update on the wellbeing of and progress being made by a very young constituent of mine for whom intensive care treatment was not available in Northern Ireland, and who was consequently separated from his parents?
Mr. Hanson: I take it that the hon. Lady is referring to Ben Marshall, who was admitted to Liverpool Alder Hey hospital on 16 February because no intensive care cot was available in Northern Ireland at the time. I hope that the hon. Lady understands and accepts that that occurred at a weekend when there was insufficient capacity, but when there would normally have been capacity.
I understand that Ben is progressing well in Alder Hey hospital. The care that he is receiving there is of a very high quality, and the staff are working hard with him and his family to ensure that he returns to Northern Ireland. I express the hope, as I did in my response to the hon. Member for Strangford (Mrs. Robinson), that it is a rare occurrence when demand outstrips capacity. It does not happen often in Northern Ireland because we usually have sufficient capacity. We are extending that capacity next year.
I wish Ben and his family well, and look forward to their early return to Northern Ireland.

Victims Commissioner

2. Lady Hermon (North Down) (UUP): If he will make a statement on progress towards the appointment of a victims commissioner for Northern Ireland. [122574]
The Minister of State, Northern Ireland Office (Mr. David Hanson): The post of Commissioner for Victims and Survivors for Northern Ireland was advertised in the press on 25 January 2007, and 46 applications were received by the closing date of 16 February 2007. The applications are being assessed in line with normal public appointment procedures. It is anticipated, and I hope, that the appointment will be made by the First Minister and Deputy First Minister if devolution is restored. If devolution is not restored, the appointment will be made by my right hon. Friend the Secretary of State. At this stage, it is anticipated that an appointment will be made, in any event, by the end of March or early April.
Lady Hermon: I am grateful for the Minister’s comprehensive response. I am sure that he is aware that tomorrow—28 February—regrettably marks the second anniversary of the disappearance and murder of my constituent, Lisa Dorrian, for which those with loyalist paramilitary connections were responsible. Her body has never been recovered. In those harrowing circumstances, what precisely can the newly appointed victims’ commissioner do for the Dorrian family?
Mr. Hanson: The first thing that should happen is that the team inquiring into the events of Lisa Dorrian’s disappearance should continue, as should the police investigation. The bringing to book of whoever killed Lisa Dorrian is the prime aim.
The victims commissioner’s role is to review the support services available to victims and their families. I hope that the commissioner, when appointed, will examine what can be done to help support Lisa’s family, but also look across Northern Ireland as a whole at the services that can be provided to victims.
Mrs. Iris Robinson (Strangford) (DUP): Lisa was murdered in my constituency. I would like to take this opportunity, on the second anniversary of the murder, to appeal to those in my constituency who may have a little or much information that could lead to someone being brought to justice for that horrendous murder. The family have indicated that they know who carried out the murder. Can the Minister tell me whether that is being pursued with all rigour? The family feel at times that that is not the case.
Mr. Hanson: I hope that I can give the hon. Lady the assurance that the Police Service of Northern Ireland takes seriously the disappearance and murder of Lisa Dorrian. My understanding of the situation is that it will pursue with vigour all information that will help to bring the perpetrators of the crime to book.

Classroom Assistants

3. Sammy Wilson (East Antrim) (DUP): What resources have been set aside to finance the re-evaluation of classroom assistant jobs in Northern Ireland. [122575]
The Parliamentary Under-Secretary of State for Northern Ireland (Maria Eagle): Substantial funding of £30 million has been made available in respect of increased pay costs arising from the evaluation exercise, including arrears. I urge employers and unions to press ahead to secure a workable and affordable agreement that would allow the money to be released into the pay packets of classroom assistants, where it belongs.
Sammy Wilson: Will the Minister give us an assurance that the money that has been set aside will be sufficient fully to finance the evaluation of the jobs that is being undertaken, or will the evaluation be suited to fit the amount of money that the Department has set aside? Given the fact that the evaluation goes back more than 12 years and covers some 12,000 classroom assistants, it seems a small sum of money.
Maria Eagle: I regret that it has taken so long to deal with the job evaluation. Technically, the discussions have been ongoing for four years, although I accept that arrears will need to be paid back to 1 January 1995. I understand that there has been substantive progress recently. I hope that that will continue and that it will be possible to reach a speedy conclusion.
The hon. Gentleman will be aware that, technically, the Government are not a party to the negotiations. I have every confidence that the money that we have set aside will be sufficient to deal with the conclusion of the negotiations, and I hope that it will be distributed to the pay packets of the 7,000 classroom assistants as soon as agreement is reached.

Inward Investment

4. Mr. Gregory Campbell (East Londonderry) (DUP): What progress is being made by Invest Northern Ireland in ensuring that more potential inward investors visit sites beyond the greater Belfast travel-to-work area in 2007. [122576]
The Parliamentary Under-Secretary of State for Northern Ireland (Maria Eagle): Invest Northern Ireland provides potential inward investors with a list of possible locations. Visit programmes are then drawn up to ensure that the locations to be visited meet the investor’s business requirements, but also providethe best opportunity for Invest Northern Ireland to sell the Northern Ireland proposition and secure the project, wherever that might best be.
Mr. Campbell: The Minister will be aware that there have been several significant public sector job loss announcements in my constituency recently at Her Majesty’s Revenue and Customs and at Driver and Vehicle Licensing Northern Ireland. I tabled a series of questions that seem to indicate that Invest Northern Ireland’s targeting of the greater Belfast area is commendable, but, beyond that, there seems to be a lack of effort—certainly a lack of output—in bringing inward investors west of the Bann, particularly to my constituency of East Londonderry. Can the Minister respond by saying that Invest Northern Ireland will up its game in trying to attract inward investors to my constituency and others like it?
Maria Eagle: I can certainly assure the hon. Gentleman that Invest Northern Ireland works extremely hard to bring inward investment to the most appropriate place for the investor in Northern Ireland, and that will sometimes be in the north-west. Over the past four years, 33 per cent. of new investment secured for Northern Ireland has been outside the Greater Belfast travel-to-work area. There has been some success in the north-west region. Over the years 2005-06 and 2006-07, more than 1,000 new jobs have been promoted there through inward investment by Invest Northern Ireland, and 2,000 jobs safeguarded. I hope that there will be more good news in the not-too-distant future. Of course, I am conscious of the fact that when there are job losses—there have been some in the hon. Gentleman’s constituency lately—it is particularly important to ensure that those jobs can be replaced, and Invest Northern Ireland will do its best to ensure that East Londonderry and the north-western part of Northern Ireland as a whole benefit as much as possible from the work that it does.
Stephen Pound (Ealing, North) (Lab): I was in Mumbai the weekend before last at an awards evening when both south Wales and central Scotland made extremely strong pitches to Indian IT companies. The one missing component in relation to Northern Ireland appears to be that there is no local government that is making a pitch on behalf of Northern Ireland. Does my hon. Friend the Minister agree that the deficit could be resolved when there is an operative Assembly, which could make a pitch on behalf of Northern Ireland with the same energy and enthusiasm as the hon. Member for East Londonderry (Mr. Campbell) has clearly done today?
Maria Eagle: I agree that local Ministers dealing with such issues would give an impetus to the effort that simply cannot be matched by others, despite the hard work that goes on. I am sure that that would be a positive development. However, Invest Northern Ireland and Ministers who are currently in place certainly do their utmost to pursue opportunities for inward investment. In fact, the north-west has recently benefited from 577 jobs with an Indian company, so efforts have been made and have been successful. I am sure that local Ministers will be able to build on those efforts very positively.
Maria Eagle: I am happy to confirm that the Department and the Government do our best to ensure that we get maximum effectiveness from our agencies, such as Invest Northern Ireland. I think that the record shows that it has never had a more successful year in terms of overall output than it has had over the previous year. I say that not to be complacent. More can always be done, and it will be tremendously important, as Northern Ireland goes forward, to ensure that we up our game and attract more inward investment. The time is now right for that to happen, and I am confident that Invest Northern Ireland will play its part. To the extent that it is sensible and helpful to review current arrangements and learn lessons, the Government and Departments do that on an ongoing basis.

Water Charges

5. Dr. Alasdair McDonnell (Belfast, South) (SDLP): Whether a restored Assembly will have the power to amend Government plans to introduce water charges in Northern Ireland. [122577]
The Parliamentary Under-Secretary of State for Northern Ireland (David Cairns): Yes.
Dr. McDonnell: I thank the Minister very much for his succinct answer, but can he explain to us what yes means? Does it mean that if the Assembly is restored on 26 March, it will have that power? What happens if it is not restored until 1 April or 10 April? At what point will the yes become a no?
David Cairns: Yes means yes. These decisions were being forwarded by the Assembly when it was meeting last time round. Indeed, the Executive specifically put in their consultation document the option of funding water through a household charge very similar to the one that we are implementing, so the Executive were actively pursuing that course last time round and they will have full competence to pursue that on 26 March and thereafter. If they decided not to proceed with domestic water charges, the Executive would have to plug a hole in the budget of about £85 million to £90 million. When local parties speak to the electorate during the election, they must be entirely honest and say that income from domestic water charges has been included in the budget and if those charges did not go ahead there would be a big gap in the budget for next year, which the local Assembly would have to find.
David Cairns: Exactly how is it dangerous to charge domestic customers in Northern Ireland for water in the same way that my constituents pay it and people in north Wales, in Liverpool, and in the hon. Gentleman’s constituency pay it? That is an absolutely ludicrous overstatement. Domestic households in Scotland pay council tax and water bills of £1,253, in England and Wales they pay council tax and water bills of £1,337 and in Northern Ireland they pay £668 in rates—half of what my constituents pay. That results in the water quality in Northern Ireland being the poorest in the UK. I have an ambition that the water quality in Northern Ireland should be the best in the UK, but that would require not only the investment that we are already putting in—£1 million a day and £1 billion over this financial period—but sustained investment over the next decade. There will not be sustained investment unless domestic customers in Northern Ireland pay their fair share on exactly the same basis as domestic customers in England, Scotland and Wales. That is not a dangerous proposal; it is a proposal that will ensure sustained investment in water and sewerage in Northern Ireland.
Sammy Wilson (East Antrim) (DUP): Does the Minister accept that he is being disingenuous with the figures that he has given? First, the comparison between his and our constituents is not correct because the same services are not covered in those bills. Secondly, the people of Northern Ireland have already been paying for their water through regional rates so with the water charge they would be charged not simply once but twice for the same service. The charge has been designed, of course, to ensure that the infrastructure that was not maintained during direct rule will be paid for again.
David Cairns: Let us unpick some of those issues. The hon. Gentleman asserts that water charges are paid through rates; they are not, as that link was broken in 1999. It could be restored, but that would mean a big increase in rates. He correctly asserts that many of the services that are provided in Northern Ireland are provided by central Government, yet in Scotland those services are paid for through council tax. Where do central Government get their money? They get it from the general taxpayer. The general taxpayer is subsidising public expenditure in Northern Ireland to a far greater extent than is happening in Scotland, Wales or, indeed, large parts of the north and north-west of England.
Lady Hermon (North Down) (UUP): We all know how unpopular the introduction of a water charge based on the capital valuation of property has been. There is no incentive to conserve water, and the charge will not be based on a person’s water usage. Will the Minister explain what progress has been made on metering and on equipping new houses, and those of pensioners in particular, with meters?
David Cairns: The hon. Lady makes an extremely important point. Of course, as part of the overall investment in and reform of water and sewerage services—it is not just about domestic bills, but is a much broader agenda—we are bringing in a regulator so that there will be full scrutiny, and removing Crown immunity from the water service, which means that it will have to comply with the full panoply of environmental regulations. We are also metering much more widely than is possible in Great Britain. The hon. Lady is right to say that new build houses will be required to have meters, and that pensioners will be entitled to a meter should they request one. The evidence from the early days of the helpline that people can telephone when we send out indicative bills is that a large number of people have requested a meter. The hon. Lady points at herself, but I refuse to believe that she falls into the category of a pensioner.
Under direct rule we shall review the issues within two years. It is of course possible that as part of taking over responsibility for the matter, as it surely will on 26 March, the Assembly could revisit water charges and decide to introduce universal metering or make it more available to other people. There is a cost implication to that, but that is part of what “yes” means: there are lots of elements in the package that the Assembly could amend, if it chose to do so.
Chris Ruane (Vale of Clwyd) (Lab): What assessment has the Minister made of the effect of water metering on large families in deprived areas?
David Cairns: I think that my hon. Friend’s point is that it could be detrimental to them, which is why we are not moving to compulsory metering. In the first instance, we are considering offering meters to those who would probably benefit most—such as pensioner households. We shall have to consider the next phase of extension of metering very carefully. We have said that under direct rule we shall revisit the issue with a full review in two years. We would have to look carefully at the impact of metering on the large families in question. However, there is a conservation message too, and if people could clearly see how much water they were using, there might be more of an impetus to conserve it. Nevertheless, we have not made any decisions about where to go next with metering, beyond saying that we shall review it in two years.

Draft Budget (Northern Ireland)Order 2007

4.23 pm
The Minister of State, Northern Ireland Office (Mr. David Hanson): I beg to move,
That the Committee has considered the Draft Budget (Northern Ireland) Order 2007.
The Chairman: I remind the Committee that debate may continue for two and a half hours. I have no power to impose time limits, but briefer speeches will enable more hon. Members to contribute.
Mr. Hanson: I formally apologise, Dr. McCrea, for not using your correct title in some of my earlier remarks, and I hope that you will forgive me.
As hon. Members from all parties will know, this is yet another opportunity for us to consider the 2006-07 budget that has previously been expended, and to consider authorising expenditure, in part, for 2007-08. I hope—I know that that hope is shared by many members of the Committee—that this will be the last time such a budget order comes before this House of Commons. We are considering the order today because the continued suspension of the Northern Ireland Assembly means that we must once again seek Parliament’s approval for the resource and associated cash requirements of Northern Ireland Departments. I know that many members of the Committee want locally elected representatives to take these decisions on public expenditure shortly, and there is currently an election campaign in Northern Ireland. I pay tribute to you, Dr. McCrea, for absenting yourself from the campaign. Many hon. Members present are both fighting an election and serving their constituents in the House of Commons. I look forward to the election on 7 March, and very much hope for the restoration of devolution on 26 March. In the absence of a current devolved Assembly sitting, it is my job to bring forward the necessary expenditure to be approved by this House so that we can continue to deliver services to people in Northern Ireland.
Lady Hermon (North Down) (UUP): The Minister will be aware that there is some media and, indeed, political speculation that civil servants are beavering away on some emergency legislation to shift the deadline from 26 March. Will the Minister confirm that that deadline will not be shifted?
Mr. Hanson: I gladly confirm that 26 March is the deadline for devolution, when there will be dissolution or devolution. Neither I nor my right hon. Friends the Secretary of State and the Prime Minister will be in a position to come back to the House of Commons a further time and say that we wish to move the deadline again. That simply is not tenable politics in the real world.
The current election gives Members an opportunity to state their cases to their constituents and to be elected or not as the case may be, and then to go back and do the deal and restore devolution. I hope that whoever happens to form the majority parties— whether it be the right hon. Member for North Antrim (Rev. Ian Paisley) and the hon. Member for Mid-Ulster (Mr. McGuinness) or the hon. Member for Foyle (Mark Durkan) and Sir Reg Empey from the Ulster Unionist party—will sit down and do the deal after the election on 7 March and before 26 March.
The draft order has two purposes, the first of which is to authorise revised amounts of resources and cash for 2006-07. The total revised amount for the year is £16.83 billion, and the total revised amount of cash to be issued from the consolidated fund for Northern Ireland is £11.19 billion.
The second purpose of the order is to ensure that we authorise a vote on account to allow funds to continue to flow to public services in the early months of the next financial year, until the main estimates for 2007-08 can be prepared and considered by a new Executive and Assembly in Northern Ireland. To do that, the order seeks Parliament’s authorisation for the use of resources amounting to £6.217 billion, and for the issue of cash from the consolidated fund for Northern Ireland amounting to £5.05 billion to commence the process of expenditure during the first part of the year pending final consideration of the budget later in the year.
Lembit Öpik (Montgomeryshire) (LD): Before the Minister gets into the detail of the document, will he accept that this is a rather preposterous way in which to analyse this level of information? While we can make general points, the idea that we can give this order proper scrutiny in a two-and-a-half-hour debate when there are, necessarily, thousands of figures in the document really is not satisfactory. Will he assure us that in the unfortunate event that Northern Ireland devolution is not resumed, we will have a proper discussion about these figures, so that they can be amended and we can have a proper dialogue about them, rather than simply saying yes or no to all of this?
Mr. Hanson: As you will be aware, Dr. McCrea, we have regular discussions on these matters. I am not happy with the Order in Council procedure or with the lack of scrutiny in relation to the Northern Ireland Assembly. I know that the hon. Member for Montgomeryshire (Lembit Öpik) is not happy either. We have already said—the Secretary of State indicated this—that in the event of devolution not being progressed, we will consider how to manage the debates on Northern Ireland devolved matters. I assure the hon. Gentleman that in the unhappy event that devolution is not restored on 26 March, we will certainly be considering what changes we can make to improve the scrutiny of the actions of direct-rule Ministers in these matters. I hope that he will accept that in the good faith that I have put it to him—in the fervent hope that it does not become necessary to see those points through.
As I said, the purpose of the order is to authorise expenditure. I certainly contend that Northern Ireland has benefited from the massive increases in investment in public services under the Labour Government. Dare I say it—I do not wish to rile the hon. Member for Tewkesbury (Mr. Robertson) so early in the debate—the expenditure is unparalleled in the history of Northern Ireland. It has contributed greatly to the progression of several public services during both direct rule and the time when the Northern Ireland Assembly was able to expend resources in Northern Ireland. The increases have been bigger than at any time in Northern Ireland’s history. By the 2007-08 financial year, we will be spending in excess of £16 billion on regional public services in Northern Ireland. Dare I tell Committee members that that is 50 per cent. higher than when our Government came to office in 1997? I do not wish to upset the hon. Member for Tewkesbury (Mr. Robertson), with whom I have a good relationship—[Interruption.] I can never resist.
The official Opposition have voted against that 50 per cent. increase at every opportunity. They have had the opportunity to put that case in every budget. Although I like and respect the hon. Gentleman, I wanted to put that on the record.
Mr. Laurence Robertson (Tewkesbury) (Con): I am sure that the Minister will forgive me for reminding him of the old saying, “A fool and his money are soon parted”.
Mr. Hanson: I am pleased that the hon. Gentleman has responded. He says that a fool and his money are soon parted; that means, for example, that he is voting against the 60 per cent. increase in education funding since 1997 despite the 6 per cent. decrease in pupil numbers. That means that he is not supporting the £100 million for the children and young people funding package, nor the £210 million invested to bring interactive learning to all classrooms. Those are just three examples of positive expenditure by the Government as part of the 50 per cent. increase since 1997.
Mr. Robertson: What about the new deal?
Mr. Hanson: Let me say to the hon. Gentleman that the unemployment rate in Northern Ireland is 4.2 per cent.—considerably lower than the UK average of 5.5 per cent. Northern Ireland employment levels have risen to 767,000 people; that represents an increase of 17,000 jobs in 2006 alone. I shall tell the hon. Gentleman about the new deal and the Government’s strong economic performance: we are creating jobs for the long-term unemployed to get people off welfare into work and try to secure the employment prospects of Northern Ireland.
I tell the hon. Gentleman that that extra 50 per cent. expenditure since 1997, which his party has opposed, has benefited the people of Northern Ireland in a range of ways.
Mr. Robertson: The Minister rather skipped over the facts and figures of the new deal. What was the youth unemployment rate when his Government came into office, what is it now and how does it compare to that of the rest of the UK?
Mr. Hanson: I do not have those figures to hand, but I am sure that I shall come to them later. The fact is that now 767,000 people are employed in Northern Ireland, an increase of 17,000 on 2006. We all recognise that the employment situation in Northern Ireland needs to be managed effectively and that we need to meet the challenges of the 21st century, not only those of the past. That is why the Secretary of State for Northern Ireland, my right hon. Friend the Member for Neath (Mr. Hain) is considering a number issues to do with how we can improve the Northern Ireland economy. Indeed, we have just put out for consultation a new economic development plan, on which I hope the hon. Member for Tewkesbury will comment. As I said, I respect the hon. Gentleman, but want to put on record the fact that evident in this budget, as in others, is the 50 per cent. increase in expenditure on those issues over that time.
There are real and tangible expressions of investment occurring in a number of areas in Northern Ireland as a result of that expenditure. For example, the Under-Secretary of State for Northern Ireland, my hon. Friend the Member for Liverpool, Garston (Maria Eagle) is in charge of a strategy for children and young people, which we published on 20 June 2006. It sets out what will be financed by that budget in the next 10 years to bring about improvements in the lives of Northern Ireland’s children and young people. The first children and young person’s action plan is now being finalised; it will set out how we will deliver on those strategic aims to ensure proper action plans for the future.
I am in charge of an anti-poverty and social inclusion strategy, which has replaced “Targeting social need” and considers how we can tackle poverty and social exclusion in Northern Ireland. It has the objective of eliminating poverty from children and young people by 2020—of ending child poverty by 2020—and ensuring that we work to tackle social exclusion in Northern Ireland.
The Under-Secretary of State for Northern Ireland, my hon. Friend the Member for Inverclyde (David Cairns) and others are dealing with the sustainable development strategy, looking at how we can ensure and support developments in the environment at large. All those resources will be paid for out of the Budget we are talking about today.
We are examining how we can improve education expenditure to make it the No. 1 priority for the Government. The estimates include £1.85 billion for the Education Department in 2006-07, including funding under the children’s and young person’s package, which is aimed at reducing underachievement and improving children and young people’s life chances. This amount will increase from £1.85 billion to £2.1 billion under the proposals in the 2007-08 Budget, committing the Government to continue to build on existing achievements, ensuring that we have a single education authority, implementation of the Bain review and proper spending in Northern Ireland at the highest level ever.
Lady Hermon: The Minister just briefed the Committee extensively on investment in young people and in education. Will he, therefore, explain to me why the budget for Clifton special care school, which has very needy children who are mostly in wheelchairs and have physical and mental handicaps, has not increased one jot?
Mr. Hanson: The hon. Lady will know that budgets are distributed by the education and library boards. We are ensuring that they have a massive increase, after which they can examine their distribution. I am not aware of the individual school in question, but I am sure that the Under-Secretary of State for Northern Ireland, my hon. Friend the Member for Liverpool, Garston will look into that matter on the hon. Lady’s behalf and report to her.
In the round, extra resources are going into education on a massive scale and next year’s budget increases from £1.85 million to £2.1 billion. That money will not just improve the level of education but pay for new innovative services, wrap-around child care and a range of measures that will improve the quality of life for Northern Ireland.
Lady Hermon: Will the Minister confirm that he will extend an invitation on my behalf to the Under-Secretary of State for Northern Ireland, the hon. Member for Liverpool, Garston, who is responsible for education, to visit Clifton special care school after the election but before the 26 March deadline?
Mr. Hanson: My hon. Friend, the Under-Secretary has indicated that between 7 March and 26 March, weekends excluded, she will make an attempt to visit that school. It is important, and my hon. Friend has undertaken a series of such visits. I am sure that she will be very happy to do so in this case. There is a great time constraint involved, and I hope that my hon. Friend’s successor as Minister after 26 March can also visit the school.
Mrs. Iris Robinson (Strangford) (DUP): On the subject of special needs teaching, in November 2005, I raised a matter in the House relating to Torbank special school, and to date the problems that it faces have not been addressed. Staff and pupils still have to negotiate their way between portakabins. The children involved are the most severely disabled one could meet. Some are in wheelchairs, some are pipe-fed, and some are epileptics. We were told that a new school would begin in 2002. To date, that school has not been built and I ask the Minister for a categoric assurance that it will be built during the next financial year so that the children will have the new buildings that they deserve and the staff who look after them will have the decent conditions that they deserve.
Mr. Hanson: I am grateful to the hon. Lady for those comments, which the Under-Secretary of State for Northern Ireland, my hon. Friend the Member for Liverpool, Garston has heard. I know that she will agree to an early meeting. As the finance Minister, if time permits, I would be happy to support my hon. Friend in visiting Torbank special school.
The hon. Lady will be aware that during the past seven years, 230 major education schemes have been undertaken thanks to a capital investment of more than £1.33 billion. During the past two years, £602 million has been invested in major schemes. I recognise her concerns and I recognise the fact that Torbank special school has been subject to a number of delays. The condition of the existing school buildings is a matter of severe concern, and I accept the hon. Lady’s point. I will examine with my hon. Friend what steps are being taken and I will report back to the hon. Lady via my hon. Friend in due course.
It is not only investment in education through which the Government are assisting the public of Northern Ireland. The Department of Health, Social Services and Public Safety has reduced hospital waiting times as a key priority, and an additional £35 million will be made available for that purpose in 2007-08. Substantial progress is being made and has been made on waiting times. For example, no patient has to wait more than nine months for surgery; the number of patients waiting for more than six months for surgery has fallen by 60 per cent. since April 2006; and the number of people waiting more than six months for a first outpatient appointment has halved since the beginning of April 2006.
Those are real changes, brought about by real investment, but also by the drive of the Under-Secretary of State for Northern Ireland, my hon. Friend the Member for Wythenshawe and Sale, East (Paul Goggins), and his officials to ensure that we maximise the benefits of that investment for the public of Northern Ireland.
In 2007-08, £3 million will be made available for the resettlement of long-stay patients into community care. That will be of particular interest to the hon. Member for North Down (Lady Hermon), because we want to move as quickly as possible on the question of learning disability hospitals, including Muckamore Abbey hospital.
From April this year, we will be bringing forward comprehensive controls on smoking in enclosed public places and workplaces.
The capital budget for the health service has increased to more than £180 million in 2007-08. That will fund a new hospital modernisation programme that includes, for example, the new maternity unit for £13.2 million at the Ulster hospital, which is scheduled to open in August 2007. There is also an unprecedented level of investment in infrastructure to support the delivery of public services in Northern Ireland.
As the Minister with responsibility for the Office of the First Minister and Deputy First Minister, I am responsible for the strategic investment board which last year invested £1 billion in public infrastructure for the first time. That is 43 per cent. or £300 million a year more than was being spent on capital infrastructure four years ago. That planned level of investment will continue to grow. Indeed, it has been given a priority by the Chancellor, in discussion with the parties, as part of his financial package for the restoration of the Assembly. Yes, that money has to be paid for. Yes, controversy is certainly surfacing during the election—it will continue beyond it—about some of the methods of payment that we are bringing forward.
On 1 April, the Under-Secretary of State for Northern Ireland, my hon. Friend the Member for Inverclyde, will be implementing the water reform programme; as he said at question time, it is important to secure investment in water services in order to improve water and sewerage services, which will make a difference for the community at large. We are making considerable investment in the water and sewerage infrastructure, including in the region of £3 billion at 2001 prices over the next few years. That water reform programme will benefit public services, and I commend it to the Committee as part of our expenditure programme for the next financial year.
The Chancellor, my right hon. Member for Dunfermline and Kirkcaldy (Mr. Brown)—[Interruption.]. His constituency is near Kirkcaldy and includes part of Dunfermline and Cowdenbeath. He will be greatly impressed by the fact that I do not know its proper name; he will find out when he reads, as I know he will, the report of the Northern Ireland Grand Committee.
In his pre-Budget report of December 2006, my right hon. Friend mentioned a number of measures that will be welcome in Northern Ireland, including additional funding of £6 million. That will provide additional help to meet the needs of some of our most vulnerable children and young people, supporting a new package of support for parents, and providing additional investment in speech and language therapy. The pre-Budget report also detailed changes designed to tackle climate change and protect the environment. That will reinforce the steps we have been taking through the environment and renewable energy funding package.
There is much to do for the local economy, and many challenges lie ahead. We have put the economic strategy out to consultation, and I will happily engage with stakeholders in the community on that should I still hold this post on 26 March. The seasonally adjusted unemployment rate in Northern Ireland is 4.2 per cent., which is lower than the UK average.
I may disappoint the hon. Member for Tewkesbury, as the new deal has had a significant effect on unemployment in our community. That is evidenced by the 75 per cent. fall in the number of unemployed claimants in the new deal 18-24 target age group between April 1998 and November 2006. I will repeat that again for hon. Members so that it is clear: a 75 per cent fall in the numbers of unemployed claimants in the new deal target group between April 1998 and November 2006. That gives us, with all the other measures that the Government are bringing forward, the second lowest unemployment rate among UK regions and one which compares favourably to the EU rate of 7.8 per cent unemployment.
I am not complacent; we need to do more. We are consulting on the regional economic strategy. I have met with the CBI, with businesses, with chambers of commerce. I will meet with anybody to help improve the economy of Northern Ireland. My right hon. Friend the Secretary of State has led delegations to try to attract inward investment to Northern Ireland. We need to be competitive, we need to re-skill, we need to face the challenges of the future, but there is certainly a considerable amount of work ongoing, of which this budget is part, to improve and equip the Northern Ireland economy in a positive way.
A couple of technical matters—
Lady Hermon: It has been something of a surprise to find that the words ‘review of public administration’ have not crossed the Minister’s lips today. He seems to be sliding out of this one very neatly, but he is not allowed to slide out. Could the Minister tell us just how much has already been expended on preparing for the review of public administration and how much is it going to cost? How much is he going to report to the right hon. Member for Kirkcaldy and Cowdenbeath (Mr. Brown)—if the Minister can get the right hon. Gentleman’s constituency right and he is still Chancellor by then—has actually been expended on the RPA?
Mr. Hanson: The Government are committed to the RPA. There are a number of elements to it. We are trying to do three or four key things. First of all, to reform the health service and to reform education services by reducing the bureaucracy in them. That certainly does have an up-front cost, but over time there will be savings to the public purse. Secondly, we are progressing the idea of local government review of public administration. The local government review will reduce the number of local authorities from 26 to seven. Those matters are still for decision by the potential in-coming Assembly and, again, the changes will have an up-front cost. I will come to that in a moment. There will, however, ultimately be a saving. A cost and efficiency exercise in November 2005 estimated the cost of implementation to be in the region of about £400 million, but estimated savings of £200 million per annum over the five to 10 years after the completion of the RPA.
I am very keen to monitor the costs of the RPA, but ultimately, if we reduce the number of councils, health authorities and education and library boards and if, as we are doing, we start to drive down backroom costs and make savings in the way in which we manage public services, we will save resources over time.
I say to the hon. Lady that yes, there will be an up-front cost, but over time there will be a saving and it is something that should be looked at. It is not just a question of saving resources; I happen to think that seven local councils with greater responsibilities and community involvement will have a better opportunity to have an impact on their communities than 26 local councils. The changes in the health authorities and education and library boards will make for much more focused and productive services in our community.
Sammy Wilson (East Antrim) (DUP): The Minister has outlined the savings which the RPA and the cuts in the bureaucracy should achieve. Would he accept that the record in Northern Ireland and the record of his Government and indeed the last executive in Northern Ireland on this is not good? We were told that all of the political infrastructure which was put in place as a result of the Belfast agreement would be cost neutral over the four years. Instead of being cost neutral it added hundreds of millions of pounds to the cost of administration in Northern Ireland.
Mr. Hanson: I go back to the original establishment of the RPA by the then devolved executive. It was never intended to be a cost-cutting exercise, it was designed to be an exercise that improved the quality of government in Northern Ireland. There is a cost up front of £400 million, there will be savings of £200 million a year over that time and the five to ten-year period and beyond but I put into the context that I think the local councils, the health service, the education service and indeed the single library authority for Northern Ireland will manage public services better than they are currently managed because there will be more capacity, more ability to influence decisions and a greater opportunity to make real and positive changes.
My final points are technical, but it is important to put them on the record. The draft order and the accompanying estimates volume contain the detail of the changes that are sought to approved provision. I do not propose to go through the changes line by line, but I am happy to respond to any questions or comments in the debate, and I shall try to respond to them at the end of the debate.
For next year, the vote on account is a mechanism to allow funds to continue flow to public services until the new Executive and Assembly can debate the spending plans in detail. The vote on account is not intended to seek final approval of the allocations for 2007-08; it simply allows us sufficient resources and cash to continue our work until 2008.
I hope that I have provided a flavour of where the Government are—
Lembit Öpik: Tradition requires me to ask a question about the Armagh observatory.
Chris Ruane (Vale of Clwyd) (Lab): I thought that the hon. Gentleman did not understand the figures.
Lembit Öpik: I never said that I did not understand the figures. There may be some on the Government Benches who have more trouble than myself.
I suppose I should declare an interest, because my granddad used to work at the Armagh observatory. It has a net variation of £268,000. Will the Minister outline whether the observatory is happy with that outcome? What discussions took place to ensure that the planetarium and observatory continues to go from strength to strength as one of the leading tourist attractions and scientific centres of excellence in Northern Ireland?
Mr. Hanson: I take great pleasure in the fact that the hon. Gentleman has a family bloodline with the Armagh observatory. He takes a great interest in planetary activity.
Chris Ruane: Lunatic!
Mr. Hanson: My hon. Friend the Member for Vale of Clwyd shouted a word that I am not sure is parliamentary. Just in case it is not, I hope that it is on the record. The moon may have an influence on the hon. Member for Montgomeryshire, among the many planets that he watches daily.
The Armagh observatory was discussed on several occasions, and I recall last year the concern being expressed that no money had been expended in terms of income. It was in fact closed during that period. This year we spent £3 million on refurbishment to ensure that the huge re-opening was a great success, and it is now a must-see visitor attraction. I am confident that the observatory will continue to contribute to the scientific and tourist potential of Northern Ireland and of Armagh in particular.
Stephen Pound (Ealing, North) (Lab): I am very grateful to my—I believe it is correct to say—right hon. Friend for allowing me to intervene. Although I do not have the same family connection or affiliation withthe asteroid belt which the hon. Member for Montgomeryshire has, like many members of this Grand Committee, I have visited that magnificent building. Although I appreciate that my right hon. Friend is no stranger to Armagh, I urge him at every opportunity to invite people to visit, and particularly to visit the planetarium, which is a truly magnificent edifice and a building that is educational and entertaining. I do not think that any public servant would ever say that they have a sufficiency, let alone a surplus, of capital, but when I was there a few months ago, they seemed not dissatisfied.
Mr. Hanson: I confirm to my hon. Friend that the observatory will play a significant role in the tourist and scientific potential for Armagh and the surrounding area of Northern Ireland. I confirm to him that he is right; I am in an interregnum. I have been confirmed as a right hon. Gentleman, but I have not yet been sworn into the Privy Council. It will happen next week. I hope that that clarifies the matter for the interest of Members.
I hope that the Budget is on behalf of the Government a positive investment in public services in Northern Ireland. We have some key targets for next year: to improve education, to reduce waiting lists in the health service, and to ensure that we tackle poverty and disadvantage and invest in the services that we need to make Northern Ireland a modern economy for the 21st century.
This Budget, both last year’s expenditure and the potential for the allocation of cash for next year’s Budget, will be significant. The Government have fought hard to spend that money on Northern Ireland. I look forward to the Assembly finalising the Budget, setting its priorities for 2007-08 and determining what it wants to do. I look forward, too, to the Assembly being locally accountable to the people of Northern Ireland, which is something that we as direct rule Ministers can never be. I commend the draft Budget to the Committee.
4.55 pm
Mr. Laurence Robertson (Tewkesbury) (Con): I welcome you to the Committee, Dr. McCrea. I think that it is the first time that I have served under your chairmanship, and it has been a pleasure already. I congratulate the Minister on his imminent elevation to the Privy Council. I hope that he enjoys his enhanced status; I am sure that he will. I echo his words: I want to be absolutely sure that this is the last time that we consider the Budget in this forum. As the hon. Member for Montgomeryshire (Lembit Öpik) has pointed out, it is absolutely impossible to consider a document of such a size in two and half hours or probably even in two and a half days. There is far too much in it. The proper place for it to be considered is in Northern Ireland, and I hope that that will be the case, not only for the Budget but for the many statutory instruments that continue to come forward although we are, we hope, only days away from restoring the Assembly.
We need to deal with matters for Northern Ireland in a different way. In the worst case scenario, if the Assembly does not reconvene on 26 March or before for whatever reason, I shall certainly do all that I can to press the Government to find another way in which to deal with legislation for Northern Ireland, because the process is totally unsatisfactory. We do not give the legislation due consideration, we cannot amend it, and it is decided by people such as myself, who do not live in the Province. That cannot be right.
If the Assembly gets up and running, that will be a major political achievement. I would pay tribute to all those involved, including the Government and the people in Northern Ireland. It is fair to say, too, that that will be the end of the beginning, and the challenge will then be for the Assembly to ensure that prosperity grows in Northern Ireland. There are many good statistics—not necessarily those quoted by the Minister—in Northern Ireland, but there are still many worrying signs. Before the debate, I looked at the speech that I made on this subject last year. One could almost read the same speech again. I am not about to, and I promise the Committee that I have written a new speech for today, but the issues remain the same. Many areas show encouraging changes—I want to stress that at the outset—but I want to consider the matters of concern.
The continued size of the public sector is of great concern. The latest figures that I have show that 30 per cent. of the work force in Northern Ireland is employed in the public sector, compared with 24 per cent. in Scotland, 23 per cent. in Wales and, in England, 18 per cent. in the south-east and the east midlands. Even the highest figure in England, 21 per cent. in the north-west, is a long way short of the figure in Northern Ireland. The public sector continues to contribute some 66 per cent. of the GDP of the Province. That is not to say that people in the public sector do not do good jobs. I am sure that they do, but that is not the way to prosperity. I was disappointed that the Minister, in an unprovoked attack on me—
Sammy Wilson: A mugging.
Mr. Robertson: A mugging, indeed. He tended to suggest that the measure of a successful Government is how much they spend. I do not think that that is the way forward. Although certain things, such as schools and hospitals, need funding and need funding properly, the measure of a Government’s success is not how much it spends. Many countries, such as China and India, are becoming competitive. If we are not careful, then they will take the jobs not only of people in Northern Ireland but of people in Europe. All we are doing in the European Union is putting regulation upon regulation. That is not the way to increase competitiveness, and that is why this country, for example, has slipped down the league of international competitiveness.
Government spending does not create prosperity. I was rather disappointed that the Minister tended to focus on how much more is being spent. I accept that discussions of a budget will deal with that, but I would have been more encouraged if some of the problems had been addressed. The challenge is to increase private sector activity, boost trade and productivity, and eventually make some moves towards reducing the fiscal deficit, which does exist and to which the Minister’s colleague referred.
The size of the public sector is a great concern, as are the statistics for working age economic inactivity in Northern Ireland. According to the figures that I have, the rate is 27.4 per cent., which is significantly higher than the 21 per cent. for the UK. Again, I raised the issue last year. It is the highest of all the UK regions, and the challenge is to reduce it. Are we going about that in the right way?
Concerns remain about youth unemployment—this is where the Minister and I had a disagreement. At 7.2 per cent., it is considerably higher than the rates for the rest of the population in Northern Ireland. Of the age groups that we consider, youth unemployment is the highest. That cannot be good, and I suggest that it is caused by the failure of the new deal. I do not know how much money has been put into the programme, but the fact that so many young people are unemployed means that it has failed.
Chris Ruane: To judge whether it has failed, we need a comparison. Does the hon. Gentleman know what the rate was in 1997?
Mr. Robertson: No, I do not have the figure, but the Minister did not have it, either, and I do not have the civil service to support me. I could, no doubt, find it. My understanding is that the new deal has had comparatively little or no impact on youth unemployment.
Mr. Hanson: The hon. Gentleman does not need figures to answer this question: if he were in my chair, would he scrap the new deal?
Mr. Robertson: To be honest, I do not know what the Conservative party’s policy is on the new deal. Given that it has failed, I would certainly try a different approach.
Mr. Hanson: I think that that is a yes.
Mr. Robertson: If the Minister would like to swap places with me, I will have a go. I will not allow the fact that that is a shameful figure to pass, no matter what joking takes place in the Committee. I welcome all the jokes, jibes and interventions, but youth unemployment is very high.
Let me deal with long-term unemployment, which is also unacceptably high. Of those who are unemployed, 35.6 per cent. have been unemployed for more than a year. That is a tragic waste of people’s lives—it is not a figure to be proud of. If we consider the UK as a whole and try to match education and skills, it appears that we are sending more and more people to university, but we are not actually providing them with the skills that businesses and industry require. The same is happening in Northern Ireland, and that needs addressing. It may be an impressive statistic that x percentage of people have gone to university, but if they end up unemployed afterwards or have degrees and education that are not required by business, we have not matched things as correctly as we should.
Lady Hermon: I am sure the hon. Gentleman knows that a Conservative colleague of his will be running in the election in my constituency of North Down. I can tell him that a number of my constituents benefit from the new deal. Therefore, will he give a straight answer to this question? Will that candidate tell those constituents, some of whom may be first-time voters, that it is a Tory policy to scrap the new deal?
Maria Eagle: He said that he does not know.
Mr. Robertson: As the Minister said, I do not know whether that is the policy, so I cannot answer the question. I made it clear that I was expressing a personal view. Given that youth unemployment is much higher than unemployment for other age groups, I suggest that a different approach is required. If anyone is saying, “Let’s carry on with the same approach,” which is obviously failing, that is a sad position to take.
The Chairman: Order. I ask you to return to the spring supplementary estimates, Mr. Robertson. You were led outside that.
Mr. Robertson: I was indeed, Dr. McCrea. I shall return to the speech that I was making, which I hope is in order. A further problem for business in the Province is the impact of industrial derating. I do not know what impact that will have, but I suggest that it will not help manufacturing industry; that has to be accepted. Manufacturing has in Northern Ireland, as it has throughout the UK, shown a slight increase in fortunes—an upturn—recently. I would like that to continue. I would not like anything to be introduced that would impede that progress.
The next issue has been raised many times. Again, I shall not disclose a new Conservative policy here. I wish I could, but I cannot. The difference in corporation tax rates between Northern Ireland and the Republic is a difficulty that the Province and businesses in the Province have to face. We all want greater investment to come into Northern Ireland, but that aim will not be helped by the very different corporation tax rates that exist. I stress that given that difficulty, it is very important that we do not pile further regulations on the businesses of Northern Ireland, which would make it even less desirable for businesses to invest in the Province.
There are, as I have mentioned, a number of very good signs; some statistics have edged the right way. Projects such as the one in the Titanic quarter, which I visited recently, are extremely impressive. Tourism has increased in Northern Ireland. The number of tourists is up from 1.4 million people in 1998 to 2 million, according to the most recent estimate. I hope, though, that that is not all negative tourism, by which I mean people visiting sites to look at murals and fences that divide communities. I know that that is happening to an extent, but I hope that we can give the message that Northern Ireland is a very beautiful place, with many positive tourist attractions. I hope that that can be built on for the future.
I know that there are various complications. There are the local rates and the regional rates. There are also now the water rates. I do not know which of those figures contain what, but just from the questions that I have had answered, it looks as though the take from rates will increase by 24 per cent., from £361 million to £448 million. I would like the Minister to confirm that there is an increase in revenue from rates coming into the budget, because it has been said many times that the change is revenue-neutral. Also according to the figures provided to me, the household average for 2005-06 is £490 and it is estimated to be £709 for 2007-08. Again, that is a massive leap—an increase of 45 per cent. Will the Minister explain why that is the case? Perhaps I am misreading the figures, but they look fairly simple. Perhaps the Minister could come back to me on that.
I did not oppose the introduction of water charges, for the reasons that I think the Under-Secretary of State, the hon. Member for Inverclyde (David Cairns), gave a while ago. There has been a discussion about whether people in Northern Ireland do or do not pay water rates, but, given the fiscal deficit, I felt that it was unfair to ask my constituents to pay water rates when arguably people in Northern Ireland do not. However, put together with the increase in general rates, that means that a lot of money will be taken out of people’s pockets and their disposable income must fall—there can be no other way of looking at it. That will not benefit the private sector. We need to boost the private sector and taking money from people’s disposable income will not do that.
Energy prices are a big issue in Northern Ireland. People in the Province have lower disposable incomes yet have higher bills for gas and electricity. Proposals for regulating for the whole of Ireland and introducing an all-Ireland market would help to bring prices down, but only when the long-term contract has ended and a more fluid system is introduced as in Great Britain. An all-Ireland-UK market would be better still because it would be a bigger market that is more likely to provide an opportunity to reduce energy prices. I congratulate the Government on introducing the new electricity trading arrangements in England and Wales some time ago and on replacing that with a system that also covered Scotland. That has been successful in keeping prices relatively low in Great Britain. It is not a perfect system and can be a little volatile, but overall it has kept prices for electricity down whereas in Northern Ireland prices have been an issue.
Dr. McCrea, you asked for short speeches and I hope that mine has been relatively short. There are a number of good news stories coming out of Northern Ireland, but I regret that, in highlighting some of the problems, I made a similar speech to the one I made last year. I am concerned about the impact of changes to the rating system, the industrial de-rating, and a number of other issues that have emerged since we last discussed this budget. I hope that the Minister will turn his attention to those issues. Rather than boasting about how much the Government are spending, he should look at how to address the problems and start to increase prosperity for people in Northern Ireland.
5.13 pm
Sammy Wilson (East Antrim) (DUP): I congratulate you, Dr. McCrea, on your elevation to the Chair. I sympathise with the Minister for having to endure this debate. He seems to get all the difficult jobs; if there is a controversial Bill or an unpopular measure, the Minister is put up for it. As has been pointed out, there are some convoluted accounts that we must discuss in only two and a half hours and the Minister has been put up for it. Having read through the accounts and looked at the language used, we must contend with resources authorised for use, sums granted and totals accruing. There is a whole range of language that has probably been deliberately designed to confuse poor public representatives.
If the officials from the Department of Finance and Personnel ever decided to turn their minds to organised crime, I assure the Committee that the Assets Recovery Agency would never trace a penny. By the time it went through the labyrinth of accounts, the flow would have been lost.
Lembit Öpik: Is the hon. Gentleman aware that if we work out the amount of money that we are discussing and divide it by the length of time that we have, we will find that we are costing ourselves £1,243,742 per second?
Sammy Wilson: The hon. Gentleman has illustrated why he is so attached to the Armagh planetarium and the stars.
Chris Ruane: Does the hon. Gentleman agree that those figures are astronomical?
Sammy Wilson: Certainly.
Let me come back to the issue that we are dealing with. This budget is critical. It may well be the one that is handed down to the Northern Ireland Assembly on 26 March, shortly afterwards or some time afterwards. As far as my party is concerned, the sooner that happens the better. However, as we have made clear—we make no apology for it—we want to enter an Assembly that, first, is sustainable, and secondly, can do its work. We are real devolutionists. Our stance is not simply to get us through an election or for the optics; although we believe that devolution is best for Northern Ireland, it must not stumble and start as the previous Assembly did, and it must have the tools to do the job if it is going to work.
Lady Hermon: I am rarely genuinely grateful to the hon. Gentleman, but I am on this occasion. Some ambiguity is building up. Will he confirm for the record that the DUP’s policy is to take this Government through the deadline, set in statute, of 26 March?
Sammy Wilson: I think that the hon. Lady has listened to election broadcasts in Northern Ireland and read election literature. I am sure that she has avidly read the DUP manifesto. If she has not, perhaps she should; that would save her asking such questions. As I have repeated many times in this place, the DUP wants to see devolution as soon as possible. We are ready for government now, but if the conditions are not right, there is no point in having a devolution that will stumble, start, fall and disappoint. The devolution must be able to last and have conditions in which the parties support those who uphold the laws that parties go into an Assembly to make. Furthermore, the Assembly must have the tools to do the job.
That is why this budget is so critical, and one of the reasons why I have some concerns about it. I shall consider some of the Government’s promises in a moment, but the budget falls far short of being able to deliver the Government’s own programme, which the Assembly will inherit, in the coming year.
Earlier, we had an exchange about water rates. The belief of people in Northern Ireland, confirmed by the Minister today, is that they paid for much of the infrastructure and infrastructural development required, especially in respect of sewerage and water—whether they have paid for it before 1999 but not since is a moot point. It was paid for but never carried out for 35 years. Now, of course, that infrastructure bill will hit whatever Administration there is in Northern Ireland in the next 20 years. Past payments and money that has not been spent on infrastructure are not reflected in the budget, so that represents a further burden on any devolved Assembly.
It is critical to ensure that any Assembly on 26 March or later has the tools to do its job, and the ability to deliver a reasonable programme for government in Northern Ireland. I want to put it on the record that it is not just a box-ticking exercise. A critical element that will help to decide whether devolution is up and running on 26 March is the economic package accompanying the devolution settlement. There is no point in having an Assembly that does not have the tools for the job and the priorities that the Government have laid down. I hope that there will be serious negotiations after 7 March and a serious attempt to resolve the problem of the economic package.
“remains our top spending priority and this was reflected in my allocation of extra resources to Health in my proposals in October.”
He then said that seeing that through as a priority
“will increase Health spending by £235 million next year”—
that was 2006-07—
“and by a further £228 million the year after, meaning that by 2007-08 total spending will be...14 per cent. higher than it is this year.”
That was the Secretary of State’s commitment, and presumably the programme for health was based on such figures.
I mentioned the confusion and multiplicity of figures. I went through them and looked at the most generous interpretation of the increase in today’s budget report compared with last year’s report. On health, the resources that have been made available have risen from £1,341 million to £1,447 million this year—an increase of £106 million. That is far short of what the Secretary of State promised, and what he said was needed to deliver the health programme in his priorities and budget statement of December 2005, in which he said that the increase this year would be £228 million. I did not check the figures for the previous year, but I suspect that they contain the same shortfall.
Any Assembly that inherits that budget and the programme for health spending laid down by the Government will face a shortfall in this one year alone of £112 million. That is already beginning to show in my constituency. Only this week, I had to contact the Minister’s office about a constituent who had broken his collar bone in November. He is still waiting for an operation. His situation has become so bad that when the operation to fix the bone eventually takes place, a piece of bone will have to be taken from his leg to join the two pieces of bone in his shoulder. Yet there is still no prospect of that operation taking place. Why? It is because of a bed shortage in the Royal Victoria hospital, the only place where it take place.
In my constituency, we have seen a big move towards community care for those who leave of hospital. As a result, Inver house in Larne is due to close. Yet when it comes to community care packages, I receive complaints almost weekly from people who left hospital on the understanding that the community care package would be delivered once they were at home, but who were subsequently abandoned. The promised community care workers and nurses are being withdrawn because of staff shortages or because there is no money.
Only on Monday morning, I met representatives of the ambulance service in East Antrim. As a result of the closure or the running down of the hospital at Whiteabbey, the service now has to take people to Antrim hospital or one of the Belfast hospitals, even though the ambulance cover has been reduced.
Sammy Wilson: I thank the Minister for that answer, but the Secretary of State said that delivering the Government’s health programme would entail an increase this year of £228 million. Not even the Minister’s figures show such an increase. The figures that he gave for the previous year do not show a £235 million increase either. I pointed out that there had been an increase in the figure, but it is not what the Secretary of State said was required to deliver the health programme.
Mr. Hanson: With due respect, I cannot remember the exact figure that the hon. Gentleman gave. However, my quick maths—it is only O-level maths—tells me that the £3.823 billion proposed for next year and the £3.587 billion for this year shows an increase of £236 million.
Sammy Wilson: I stand corrected. I probably misheard the figures. I was doing the calculations on a figure that I had heard, but I am more than happy to take the figures from him.
Mr. Hanson: If it helps, I shall give the figures again. In 2005-06, the figure is £3.34 billion; in 2006-07, it is £3.587 billion; and in 2007-08, it is £3.823 billion. That is a £236 million increase between the current and the forthcoming year, and it is some £500 million more than two years ago.
Sammy Wilson: I come back to the point that there are five different sets of figures before us. We have the resources for use, the cash figure, the accruing resources, the non-operating accruing resources and so on. We should bear in mind that some of those figures are notional. If the Minister is counting in the notional figures, he will get the increase indicated by the Secretary of State.
Mr. Hanson: That does not include capital expenditure, which in the next financial year will be £208.7 million, compared to £176.3 million in 2005-06—an increase of £32 million.
Sammy Wilson: I will take the figures that the Minister has given. However, I am not so sure that two and a half hours of debate across the room is the best way to scrutinise the figures. There is a better way of doing it. I am sure that if we had an opportunity for a more intensive consideration of the figures, we could draw more out from them. On the ground, the facts are as I have described: they include longer waiting lists, the closure of facilities and ambulance cuts—and that is in only one constituency. The Minister must accept that the programme that the Assembly will inherit is a programme designed for further cuts.
Mrs. Iris Robinson (Strangford) (DUP): I heard some Labour Members making comments about this being a good budget, but I remind hon. and right hon. Members that Northern Ireland is a different place from the mainland. Hundreds of millions of pounds each year go out of our health budget automatically to deal with victims of the 35 years of the troubles. How much do hon. Members think that kneecappings cost to treat? There is an ongoing care element to health service provision. People who were bombed, blown up and scarred when they were young have to get plastic surgery as they grow older. When we take all that on board, we are a special case, particularly when it comes to our health service provision. Hon. Members should take account of that when they consider what appears to be an enormously large amount of money.
Sammy Wilson: The Minister has given us figures that include many notional figures. I take it that people comparing one year to another would prefer to consider the cash sums that are granted. If he considers his figures for the cash sums that have been granted, he will see that the increase is nowhere near those that he mentioned in his earlier intervention.
Chris Ruane: The Minister has described a £500 million increase in the health budget over a two-year period. If that is not enough, how much would the hon. Gentleman say is enough?
Sammy Wilson: The £500 million is not cash, and the Minister would confirm that. It includes many notional sums. When the Secretary of State talked about the programme for health in Northern Ireland, the figures that he gave were for cash sums. He said that additional cash sums of £235 million and £228 million were to be made available. If the Minister is telling me that the figures that he has given are totally made up of cash increases, I will stand corrected. My reading of the accounts and of the description of the terms used is that the figures that he has given are not cash increases, however, whereas the Secretary of State said in his 2005 priorities and budget statement that extra cash would be injected into the services. My answer to the hon. Gentleman’s question is that the amount falls short of the amount of cash that the Secretary of State said would be required to deliver the health programme. We are seeing the effects on the ground, which is one of the reasons why I believe that it is critical to get a proper economic package.
The second area is education. The promise was that there would be cash increases for education of £100 million in 2007-08. The cash resources that have been made available stand at £43 million. On top of that, there are crazy decisions. Against a backdrop of falling rolls and 54,000 empty school places in Northern Ireland, the Minister with responsibility for education, in order to meet the requirements of the Belfast agreement, is opening duplicate and triplicate schools for those who want Irish language schools or integrated schools, even though around them there are half-empty schools. For political purposes, an added revenue burden is being placed on any future Administration.
Lembit Öpik: Although I do not invite the hon. Gentleman to engage in a debate about the rights and wrongs of integrated education, may I ask whether he accepts that we need a more strategic approach to it? I recognise that his view may be different from mine, but the Government need to look strategically at investment in schools, because wherever one standson integrated education, there is a problem of overcapacity, as he rightly points out, and the organisation of schools is at present sending a lot of money down the drain.
Sammy Wilson: I agree with the hon. Gentleman. Indeed, the rationalisation of schools will actually give a greater opportunity for shared use of school facilities. Schools may not be officially integrated in the way that the integrated education lobby would like, but better use will be made of the buildings. Rationalisation will ensure at least that local schools are available to people of all religions, denominations and ethnic backgrounds.
The Secretary of State indicated in the priorities document that good infrastructure is important, and there is a huge infrastructural deficit. I want to mention two areas in my constituency. The first is the A8, which is the main route to the port that is the entrance to Northern Ireland for the vast majority of tourists and roll-on/roll-off vessels. In many places, it is just a single road with no dual lanes and so on. It is used by farmers driving tractors, yet it is identified as one of Europe’s strategic routes. Despite the additional money that the Government have allocated to infrastructure—there has been a cash increase of £46 million for the next year—there are no plans to improve that road for the next 15 years. That will impact greatly on the port of Larne.
I would like the Minister to give an answer on one further point. I was happy that he made an announcement about the other main route into East Antrim, the A2, but many houses have been blighted, because people will lose a substantial part of their property. Some houses have been on the market for six to nine months with no buyers, but people have to move for family reasons. I would like an assurance from the Minister that there will be no delay in purchasing those properties if there are requests to purchase them under a blight order. People want to move from their properties and get their youngsters into school for the next school year and so on.
The other big area of infrastructure is, of course, the railways, which are important if we are to have sustainable development in Northern Ireland. Under the last Assembly, my hon. Friend the Member for Belfast, East undertook significant infrastructural development in the railways, but it still has to be completed. I understand that there is a bid in for the work. Perhaps the Minister will let us know whether these budget proposals reflect the bid for new rolling stock and for the upgrading of the railway lines that need upgrading.
5.40 pm
Mr. Alan Reid (Argyll and Bute) (LD): I congratulate you on your elevation to the Chair, Dr. McCrea.
I hope that this is the last time that we discuss the Northern Ireland budget in this format. As other hon. Members have said, two and a half hours is clearly not sufficient time to give the budget proper scrutiny. If the Assembly were up and running, it would have the time to go through the budget properly and to question Ministers in detail. I welcomed the commitments given by the Minister that if the Assembly fails to be established on 26 March, the Government will consider improving the way in which Northern Ireland legislation is scrutinised here. I suggest to the Minister that if that does happen, we should have the power to move amendments to the budget and we should consider income and expenditure together.
Today, we appear to be going through the several billion pounds of expenditure and making suggestions as to where less or more could be spent, but to do budgeting properly, we should be discussing income as well as expenditure. That would include, in this case, the setting of charges—regional rates and water charges—as well as expenditure. Given how things are done here, it is tempting for hon. Members to go through the budget and suggest places where more should be spent. Indeed, I shall surrender to that temptation myself, but to do budgeting properly, we should be discussing both income and expenditure, and if hon. Members wanted to move amendments entailing more spending somewhere, there would be an onus on them to say where the money would come from, either from cuts elsewhere or increased charges.
I want to make a few comments about the supplementary estimates. On page 127, the document says that an extra £66 million—that is if both cash and resources are added together—is allocated to the Department of Finance and Personnel. That seems an awful lot of extra money for what is an administrative Department. Will the Minister explain why the money has been allocated to that Department and not to front-line services?
Page 230 relates to the Department for Regional Development. Line A-2, which relates to ferry services and air and sea ports, shows a reduction in net provision of £1.6 million. I remind the Minister that last year when the Scottish Executive produced the proposal to restart the Campbeltown to Ballycastle ferry service, they were prepared to pay £700,000 a year, and according to previous agreements with the Northern Ireland Executive, when they were in existence, the Northern Ireland Office’s share was to be £300,000. I was very disappointed when the Northern Ireland Office refused to pay its £300,000 share. I note that according to that budget line there has been a cut in expenditure of £1.64 million. Clearly, there would have been plenty of money from which to pay that £300,000.
I therefore ask the Government to examine the proposal again, because restarting the ferry service from Campbeltown to Ballycastle would be a tremendous boost to tourism in both Kintyre and Northern Ireland. At present, there are no direct links across the North channel, but I am sure that if tourists were allowed to make that connection, there would be scope for attracting tourists to the area. There is a shared heritage between Kintyre and Northern Ireland. I am sure that plenty of tourists who come to look at the heritage of Scotland and Ireland would be delighted to be able to use a ferry link there, and that that would bring about an increase in tourism in both Scotland and Northern Ireland and increased employment opportunities on both sides of the North channel. Given that there has been a cut in relation to that budget heading of £1.64 million, I ask the Government to take another look at spending that £300,000.
Further down page 230 is line B-4, which relates to non-cash items, where there is the very large increase in net provision of £3.5 billion. It appears to relate to a transfer of resources from the Water Service to Northern Ireland Water Ltd, but that is a large sum to be explained away by a few words. Will the Minister explain in detail what that £3.5 billion represents?
Under the section on the Office of the First Minister and Deputy First Minister on page 277, I note that the allocation for the civic forum has been cut from £500,000 to £50,000. It would appear that the civic forum has been shut down with only a little bit of ticking-over money. I understood that the civic forum was an essential part of the Belfast agreement. Will the Minister tell us what the Government’s intentions are regarding that?
My final point relates to superannuation. There are increases at various points in the document: on page 73, there is an increase of £2 million for teachers; on page 143, an increase of £23 million for finance and personnel; and on page 185, an increase of £0.5 million for health and social services. Will the Minister explain why it is necessary to increase expenditure on the pension fund? Has it perhaps not been performing as well as expected? I would like an explanation from him, and I hope that he will be able to respond to those points in his winding-up speech.
5.47 pm
Stephen Pound: I apologise to you, Dr. McCrea, for any unintended solecism earlier on when I referred to the Minister of State by his honorific. I did so in certain anticipation, and I am sure that I speak for the whole Committee when I say how proud we are of his elevation to the Privy Council.
Had I a political career to blight, my saying that the hon. Member for Montgomeryshire made some pertinent points would surely—to use the expression in common parlance in this Committee—kneecap it thoroughly, or even six-pack it. The hon. Gentleman actually made a serious and sensible point. It was uncharacteristic, but all the more welcome for that. He argued that we have an la carte reaction: a series of statistics, reports and actuarial analyses that we can either accept or reject. We cannot move positive or negative virement, or transfer funds from one area to another. We cannot strike out individual spending commitments, tempting though that may be.
We can, and must, seek to understand what we are trying to agree. This is where I look to the Minister for enlightenment, as I have done frequently in the past. I have to say that never have I been disappointed or frustrated in that quest. Having glossed over the Armagh observatory and planetarium with a brief prayer of thanks for the support given by Her Majesty’s Government to that remarkable institution, my eyes fell on budget head A20 on page 35, dealing with the Sports Council for Northern Ireland. I see that £258,000 is being internally transferred for safe sports grounds. An excellent idea, one might say. I frequently visit sports grounds in Northern Ireland, although I am sure that members of my family would not be too happy to hear that I go to Glentoran. I usually go with earplugs because the nature of the songs sung on the terraces of the Glentoran Oval is occasionally slightly jarring to those of my background.
However, when one sees £258,000 being transferred for safe sports grounds, one asks the question, “From whence comes the money?” We then see that £211,000 is being transferred from sub-head A5/3 . We glance backwards and find that sub-head A5 refers to museums. We appear to be taking money from museums and spending it on sports grounds. I am sure that that is entirely sensible. However, we see that a decrease in provision for sub-head A5/3 of £311,000 to reflect a £211,000 transfer to A7/3, which brings us back to A20—the sports grounds. On A31-1, we see some more money from different headings also transferred across for that purpose.
What is the common factor in all those transfers? It is not that they are surplus funds or previously expended sums that are now considered redundant, even otiose, or that the museums of Northern Ireland are so flooded with cash that, needs must, they must turn away the funding and say, “We have so much that we do not need it”. No, in every case, it is because of something called capital investment re-profiling. That may well be a form of fiscal plastic surgery, but in my experience, capital investment re-profiling is usually the accountant’s version of a three-card trick. It usually means that the repayment period of a particular sum of money is extended over five, 10 or 15 years on the assumption that one day a Conservative Government will come in and be responsible for it. It means that one re-profiles it on the books by placing it in a different category head, by calling it something else and putting it under a different budget head.
I am no supporter of the modern namby-pamby habit of sitting to watch football; that is not how those of us who for many years have supported that noble game—the working man’s ballet—prefer to watch, although at Glentoran Oval, ballet is seldom on the menu, although the sights are certainly exciting. However, I hasten to add that I have no argument with safer sports grounds. However, budget re-profiling is the fountainhead from which flows the cash cornucopia—three streams of money that make up the £258,000 internal transfer, consisting of £211,000 from sub-head A53, £23,000 from A19/3 and £24,000 from A13/3.
But what exactly does that mean? Have we discovered the holy grail of financial manipulation and management? Have all our problems come to an end? Is capital re-profiling the answer to all our difficulties? Can we forget about water rates and additional places in schools? Can we look to the salvation of capital re-profiling to answer all our concerns, problems and worries?
On a serious note, how can we realistically and seriously state that we are scrutinising this legislation? In fact, we are observing a series of movements printed on the page—not as potential transfers, but as faits accomplis. What, realistically, can we do when faced by such payments, and by what democratic process was the decision made to take those three sums from those three different budget heads and place them in the safer sports ground budget? How is that accountable? How do we, as a Grand Committee, have any say in that? If we are simply to put a tick or a cross against this order, two and a half hours is two hours 29 minutes too long.
I look, as ever, to the Minister for a response, which I am sure will embarrass me as I will have failed to spot something very serious and obvious. There is a profound point beneath our discussion, which I thank the hon. Member for Montgomeryshire for raising.
5.54 pm
Mrs. Robinson: I apologise to hon. Members. I must catch a flight home tonight for an important engagement and will not be able to stay for the winding-up speeches. I also apologise to the Minister for that, but I look forward to reading Hansard later to see the answers to the questions I will raise.
I wish to mention again the issue of intensive care cots for newborn babies in Northern Ireland. The number of babies requiring specialist neonatal cots has clearly increased over recent years because medical advances mean that more premature and unwell babies manage to survive. The Minister responsible has admitted that the demand for neonatal care has increased. The extra £800,000 allocated to neonatal care for the coming year is a welcome step. The cost of creating and maintaining one such specialist cot is significant and the extra funding will allow for one additional intensive care cot, another paediatric intensive care bed, and the development of a managed clinical network.
Senior consultants spend valuable hours on the telephone arguing for beds for sick babies under their care. Greater co-ordination of the different units across Northern Ireland is essential and figures from the Minister suggest that the number of newborns who require transfer because cots are not available is not large. I agree with that. However, I am more interested in the number of pregnant mothers who are being transferred across the water or to the Irish Republic for the same reason prior to giving birth.
A lady from the Shankill road area in Belfast was in the local press. She recently had to travel to Drogheda in the Irish Republic because there were no neonatal cots available in Northern Ireland for when she was due to give birth. Aside from the obvious disruption that causes to women and their families, there are always costs to the health service associated with transferring patients. I am sure that the Minister agrees that we must ensure that Northern Ireland has the capacity to meet the needs of our population.
Mr. Hanson: I hope that I can reassure the hon. Lady that I wish to see changes made. She raises an important point and, as she will be leaving the Committee before the end, it is important that I try to reassure her now. Over the past five years, only four newborn babies have been transferred out of Northern Ireland because there were no specialist cot facilities available. Another 15 babies have been transferred for specialist treatments not available in Northern Ireland and fewer than 20 mothers have been transferred with their babies in utero. The hon. Lady makes an important point, which is crucial to the families affected, but compared with the overall number of live births in Northern Ireland, it is still a relatively small concern.
Mrs. Robinson: I accept what the Minister says and thank him for his intervention. However, four mothers having to travel outside Northern Ireland is too many. We were promised that facilities for ill babies—premature or otherwise—would be able to be dealt with at the Royal group of hospitals once the Jubilee was closed. I am sure that hon. Members will agree that any parent having to travel outside the United Kingdom would be traumatised by moving away from family and friends. There are costs associated with moving mothers and babies to other parts of the mainland or to the Irish Republic.
I know we are all rooting for baby Ben to come through and I was sad to read in a newsletter this morning that he had not made progress. However, I read the Belfast Telegraph tonight and it said that he has made progress. We thank God that that wee soul is improving and we continue to pray that he will come through and be a healthy young man. We must put on record our praise for the care taken and efforts made by the Ulster hospital staff to organise a bed for the six-week-old baby. It was something they could not cope with at the time. That highlights the need and the importance of having a devolved Administration in Northern Ireland and local politicians taking responsibility for and control of our affairs.
Major changes must be made to the health service locally to give people the confidence in the NHS that they deserve if and when they need attention and the delivery of services. The number of seriously ill babies who could be treated in Northern Ireland would undoubtedly prove increasingly expensive. I know that. However, the need appears to exist, and the difficulty with finding sufficient cots or beds is not that infrequent. With more and more medical advances, babies who survived previously are doing so. Substantial costs are incurred for babies travelling outside Northern Ireland, and only on the rarest occasion should a young patient be forced to travel elsewhere.
I shall deal quickly with the provision of educational psychology in Northern Ireland. The figures that the Minister recently provided reveal that it takes approximately 20 months for some individuals to be seen by an educational psychologist. In the South Eastern education and library board area, there is a particularly serious problem, because the area contains a high number of special needs children. That region of the Province includes my constituency, where poor management of budgets led to significant cuts in vital services in recent years, and costly commissioners had to be introduced to oversee the board’s financial management.
Educational psychologists are tasked with tackling problems that young people in education encounter, which may involve learning difficulties and social or emotional problems. It is therefore important that we meet the needs of those children to enhance their learning prospects and to help teachers to become more aware of social factors that affect teaching and learning.
Educational psychologists deal with extremely difficult cases, such as young people on the autistic spectrum, with developmental disorders, dyslexia, attention deficit disorder and ME. More and more young people in Northern Ireland, tragically, are being diagnosed with those conditions, and it is important that problems are detected early so that supportive intervention can be instigated.
I now turn to a rural school in my constituency, Derryboye school. It is located at the side of a busy main road, where one can speed up to 60 mph. For some time the principal and staff have been lobbying for the provision of a car park to decrease the obvious potential for road traffic accidents. The farmer who owns the land adjacent to the school is happy to sell it for a nominal fee, but the South Eastern education and library board has insufficient funds to build the car park.
In dealing with the current security situation in Northern Ireland, the demands being made of the police are thankfully not what they once were. That is not to justify the horrendous way in which the Royal Ulster Constabulary was treated, or the abominable Patten report. Likewise, the cuts that have already been made to police resources have left many communities feeling isolated and exposed to the actions of criminals. It has served to nurture a growing climate of fear among the most vulnerable in society, many of whom rarely venture beyond their front doors after dark.
It was noticeable during our canvassing that once 6 o’clock came round, old people in particular would not open their doors to receive election material. One might say that that was because it was the Democratic Unionist party, but I can assure all Members that that is not true; I have talked to a few members of the opposition, and they said that they received the same response.
Between 2002 and 2005, officers were called out on almost 60,000 occasions. We now read of plans to cut £300 million from the policing budget, which will result in 2,500 fewer hours on duty for officers, 300 civilian jobs axed, more station closures, and delays to station maintenance and improvement. That can only have a negative outcome.
I cannot sit down without mentioning the iniquitous cod recovery scheme, based as it was on anything other than scientific fact. It has run for seven years with no indication that it has succeeded. Tie-up aid has been crucial to ensure that the white fish fleet remained viable. Our concerns were dismissed and the refusal to grant that aid in 2006 and 2007 has now resulted in the extinction of the white fish fleet. It is alleged that the decision to refuse aid was because it was not value for money, but if that was the case, why did the scheme operate in 2004 and 2005? If it was value for money in those years, what changed in 2006 and 2007?
I want to raise a specific case concerning water charging, which my hon. Friend the Member for East Antrim dealt with in detail. Mrs Loretta Atchison and her husband live at 5 The Spires crescent in Killinchy. She suffers from multiple sclerosis, and her husband has Parkinson's disease. They receive a reduced rates bill as a result, but they have been told that they do not qualify for a reduced water rates bill. The Minister should agree that such discrimination cannot be tolerated, and I trust that the matter will be addressed.
I would like to raise many other issues, but time does not permit that, and I agree with the hon. Member for Montgomeryshire that two and a half hours is insufficient to deal with all the issues that we, as elected representatives, would like to raise on behalf of our constituents. However, I would like the Minister to consider matters such as back-up for carers, particularly those who look after Alzheimer’s sufferers and those who suffer from mental illness. The Government have been guilty of relying on the good will of families and friends to look after people with severe mental illness. I plead with him to consider allowing appropriate medications to be given to Alzheimer’s sufferers, particularly if the medication helps their quality of life.
I want to take the opportunity to talk about the rise in suicides in Northern Ireland. That is becoming a major concern to many of us, and perhaps the Minister will consider a wider provision to deal with the matter. It applies not just in west and north Belfast, but across the board. I would like to see projects rolled out to deal with that important matter.
Another matter that I want to raise is the need for more mental health services for children and adolescents. There may be plans in the pipeline for a new facility, and I hope that it will have provision to deal also with eating disorders and bulimia.
I thank the Minister for his help in the past, and I trust that this is the last time we see him dealing with matters pertaining to Northern Ireland. My hon. Friend the Member for East Antrim and I belong to a strongly devolutionist party, which believes that the way forward in Northern Ireland is to have our own devolved Administration with local people making decisions that affect the lives of our local population.
6.9 pm
Lady Hermon: I know that the word “historic” is often bandied about in this place and elsewhere, but this is an historic occasion from my perspective because it is, I believe, the first time that the Committee has been chaired by a Northern Ireland MP since I was elected to the House in 2001. Many congratulations to you, Dr. McCrea. I am delighted to sit under your chairmanship.
This is also an opportunity to congratulate the Minister on his appointment to the Privy Council, which is richly deserved. We look forward to celebrating that with something other than the devil’s buttermilk, which might offend some people. I look forward to being invited to the party afterwards by the Minister.
It would be churlish of me not to welcome the additional investment in Northern Ireland by the Labour Government. Northern Ireland is an integral part of the UK, and I certainly welcome the additional expenditure that the Minister has confirmed in this order. Yes, it is a short debate at two-and-a-half hours, but it is about increased expenditure. If the Minister checks the Hansard reports, he will, I hope, find my name amongst those who voted with the Government, in the correct Division Lobby, for increased expenditure, including the new deal, on a previous occasion when we did vote through a budget.
That said, it is with a sinking heart that I look back at our last debate on a draft budget for Northern Ireland, on 20 June 2006. In that debate, I addressed four specific issues, of which I shall concentrate on one today. The first issue that I asked the Government to consider was a very important one: the travel costs of those who have been diagnosed with cancer and who wish to come to the best hospital for treatment, which happens to be in Belfast.
The Belfast City hospital has a wonderful cancer treatment centre, which is the regional centre for cancer treatment. The additional travel costs of those who have to travel there daily for radiation, chemotherapy or other treatments are an enormous financial burden on those families. I asked the Government to look into that, particularly the Macmillan Cancer Relief campaign, but if I were to ask the Minister today what changes there have been, I think he would say that there have been none. Indeed, he is indicating that there has been no change.
Mr. Hanson: I do not know.
Lady Hermon: The second issue that I raised was increased funding for the key steps programme—an educational programme through the North Down and Ards Institute. The programme has been very beneficial, particularly for young people from housing estates such as the Kilcooley estate. I asked for increased expenditure in that programme, yet here we are at the end of February and, again, if I asked him, the Minister would probably tell me that there have been no changes there.
The third point that I raised—here, we get the drift—was also to do with Kilcooley. It was about the hugely successful community restorative justice scheme. The Select Committee on Northern Ireland Affairs has just published its report, in which it is highly complimentary about the success of the impact scheme in Bangor, in particular, where we no longer have blood on the grass, literally, from paramilitary beatings. In 2001, when I was newly elected, I regularly phoned the Housing Executive to ask for people to be transferred out of Kilcooley. There is now a waiting list. The Housing Executive has tried to deal with hundreds of people who are trying to get back into Kilcooley. That is how successful the impact scheme has been in that area. However, the Government have not increased the expenditure on it one iota.
I shall focus the remainder of my remarks on the fourth issue that I raised in our last debate. That issue, which the hon. Member for Strangford touched on, is very close to my heart: treatment for Alzheimer’s sufferers. Anyone who has listened to the news today will probably have heard something about this. Radio Ulster led with the issue, as did BBC Radio 4 and the World Service. The radio is always on in every room in my home. As an Alzheimer’s sufferer, my husband rarely has a full night’s sleep, so the radio is constantly on. Radio 4 led with the news this morning that in the United Kingdom 700,000 people are currently diagnosed with dementia, and it is estimated that it incurs a yearly expenditure of £17 billion.
I was particularly struck by the amounts of money that the Minister mentioned in his introductory remarks. The total advised for Northern Ireland for 2006-07 is £16.83 billion—almost £17 billion. That is the total sum in the budget allocation that we are discussing this afternoon. That budget would be entirely eaten up with the current cost of those suffering dementia UK-wide. My husband is not alone in Northern Ireland. It is estimated that there are 17,000 dementia sufferers in Northern Ireland. I am sure that the hon. Member for Belfast, South could confirm it, but I believe that that is an underestimate.
GPs are always encouraged, and morally rightly so, to make as early a diagnosis as possible of all conditions, including all cancers and dementia, because we know that if a condition is diagnosed early the treatment has a better chance of success. Alzheimer’s is a ghastly illness. It not only steals a person’s memory, but it steals their personality and their personal dignity—and it is absolutely incurable.
During the Committee’s debate in June 2006, I urged the Minister responding to the debate to answer this point. The National Institute for Health and Clinical Excellence guidance for the Department of Health in England and Wales said that the medication, which we know is very successful in the treatment of Alzheimer’s once it has been diagnosed, should be received on the NHS only by those who are moderately or severely confused. That left GPs throughout the country with an enormously difficult moral dilemma. Yes, doctors can make an early diagnosis, but to the carer and the sufferer they have to say, “I’m terribly sorry, but you are not confused enough for me to be able to prescribe the appropriate medication.” That was the NICE recommendation to the Department of Health in England and Wales in the autumn.
I must tell the Committee that we are not talking about an expensive treatment. Effective treatments such as Reminy cost an average of £2.50 a week. I repeat that: £2.50 a week. I am sure that the Minister sometimes does the shopping; that is the same as two large bags of potato crisps on special offer. That is the cost per week of effective treatment for Alzheimer’s.
I commend the Under-Secretary of State for Northern Ireland, the hon. Member for Wythenshawe and Sale, East (Paul Goggins), who is responsible for health matters in Northern Ireland. He is not with us today, but I am sure that his colleagues will respond for him. He kindly wrote to me after that Budget debate. He wrote on 20 July 2006 in response to the points that I had raised in the debate, and said that as of 26 June 2006
“all new NICE guidance would be reviewed locally for its applicability for Northern Ireland. The local review of the institute’s appraisal and determination on the Alzheimer’s drugs is now under way, and my Department will advise on the applicability of the final NICE guidance to Northern Ireland shortly after it is published in England and Wales.”
He said it would be shortly after publication in England and Wales.
It must be patently obvious from the research published today that the burden of the cost to the economy and to this country is shouldered by carers. If there is not early intervention by appropriate medication, greater numbers of those suffering from Alzheimer’s and other forms of dementia will need residential and long-term nursing care. Budget commitments and demands on the NHS and elsewhere will simply escalate. The common-sense and morally correct thing to do is to intervene as early as possible with the appropriate medication. Will the Minister confirm that his colleague—the local health Minister in Northern Ireland—has not followed the NICE guidance in England and Wales and will not wait for the judicial review of that guidance, but will take the opportunity to make the right decision in Northern Ireland? That would mean that at the earliest diagnosis of this ghastly, horrible illness, GPs are not faced with a moral dilemma imposed on them by the Government, but instead will be able to say to the carer and to the sufferer, “Yes, of course, I can prescribe the treatment on the NHS”. That is the confirmation I would like from the Minister.
I regret that the Minster’s colleague, who was responsible for many things, including the ridiculous introduction of water charging based on the capital value of someone’s property, is not present now. I said in response to his intervention that I had attempted to contact the water service helpline because my husband, for whom I have power of attorney, is the householder in my home. My husband is obviously unable to apply for a water meter and I, as his wife, can do so. When I married my dear husband I felt as if I had married the entire Herman family as I took Jack’s sister, who is a wonderful woman, into our home. She lives within our home and has always done so in a separate granny flat, which is an integral part of our house. She is 80 years old—I am sure that she will not read Hansard so will not know that her secret has been given away. When I phoned the helpline, I was queried that two application packs for a water meter could not be sent to the same address; what a ridiculous, outrageous reply from a helpline. When I quibbled with the young lady, she said that she needed to take further advice and, in fairness, she did come back after some time and confirm that, yes, two application packs could be sent out to the same address.
My family is one of 17,000 families throughout Northern Ireland whose carers will be in a similar position. I do not want them to be faced with a helpline inquiry that could be easily resolved and I would like the Minister to confirm that greater attention will be paid to those who suffer from Alzheimer’s, particularly their carers, who carry an enormous burden. If the Minister could lessen that burden, we would all gladly welcome that, including myself.
6.23 pm
Dr. Alasdair McDonnell (Belfast, South) (SDLP): Thank you, Dr. McCrea, for your tolerance and forbearance, and for affording me a brief comment. If I had the time, I could probably take up the full two and half hours teasing open the full implications of the budget and the changes and adjustments therein. However, like the last two speakers, if I had the time, I would raise the many health issues that affect each and everyone of us in our daily lives and that we encounter during our work as MPs. Major issues were strongly grappled with by the former Minister for health, now the Under-Secretary of State for Culture, Media and Sport, the hon. Member for St. Helens, South (Mr. Woodward). They are now being grappled with by the current Minister. I mean no criticism or disrespect to either, but there are major problems, including youth suicides, that must be dealt with. I believe that mental health will be a Cinderella issue and will be deprived of finances within the health service. Like the previous speaker, I have deep sympathy with those suffering from Alzheimer’s. I could spend time debating with the hon. Lady and other hon. Members the implications of Alzheimer’s and the need for a much more personalised support service. The service we have is far more generalised and is not about names or people, but about numbers and statistics.
There is much to be done on cancer. Again, it needs to be factored into the budget. Much of this could be further factored into primary care. I commend the Government on the changes that have been made in the past few years in terms of shifting care to primary care. They have worked. I try to do an occasional surgery and do a little medical work to keep my hand in, as it were. From my limited experience, I know the difference that has come about. People are now getting a much better service from primary care. I hope that that continues and is expanded.
I commend the hon. Member for North Down and reinforce what she said about better access to vital drugs. The reality is that there are drugs that can improve the quality of life, not just for Alzheimer’s patients but for many others, and we are much too slow in giving access to them. I honestly think that the proverbial man or woman in the street believes that decisions are made on a cost-saving rather than a clinical-care basis. I meet with that daily, with six or eight people attending my office on a regular basis screaming about drugs. That is only the tip of the iceberg in my constituency.
I want briefly to express serious concerns about an aspect of the budget that has not been dealt with. We have talked much in the past few months about generating prosperity, growing the private sector and reducing the overdependence on the public sector that has existed in Northern Ireland for the past 30 or 40 years. I notice in the spring estimates and the draft budget notes that there are considerable slippage and significant reductions in vital areas. That is ill-advised. I do not mind changes taking place or waste being trimmed out of the budget, but vital moneys should not be trimmed out. Otherwise, one throws the baby out with the bath water.
There are serious issues in my constituency, but I also know of problems at several schools in your constituency, Dr. McCrea, where the buildings are falling down around the children. Many of those schools were built 35, 40 or 45 years ago. Schoolchildren are housed largely in portakabins, in facilities that are not fit for them. They are expected to learn in places that are more like air raid shelters or aerodromes, where the wind blows through. I could mention several maintained schools in my constituency that need refurbishment and improvement, but I shall refer to just two. Cairnshill primary school badly needs rebuilding, as does Taughmonagh primary school, which is in one of the most disadvantaged areas in Belfast. There has been an argument about its facilities for three years. The students gave up their school and moved into portakabins to allow a special needs school next door to be rebuilt and expanded. They are still in the portakabins and are being told that they cannot have the school back. I urge the Minister to do whatever he can to impress upon his colleagues that Taughmonagh primary school has to be rebuilt urgently, because no child should have to suffer what those kids have been going through. I could list other schools, but I shall not.
We need greater and better focused investment in education because it is at the under-age and early-years stages that education needs to be dealt with. Once a child reaches 10, 11 or 12 years of age, their ways are set and little can be done to remedy shortcomings or disadvantages.
Under employment and learning, I note that there is slippage in this year’s budget and provision for much more slippage in next year’s budget; in other words, the budget has been cut. If we are to gear ourselves up for greater dependence on the private sector, we badly need better training. I shall not deal with high-technology training, as I could go on for ages about it. There are several issues that I could deal raise, but I shall discuss just one: the need for better modern apprenticeships. Any tradesman who I speak to tells me that it is not cost-effective for him to apprentice a plumber, electrician and so on. They do it out of the goodness of their heart, but insurance and various other costs are so prohibitive that it is mainly a nuisance and a burden. They give up in many cases because they feel that it is not worth while. I consider that modern apprenticeships are assets that we need to work with and maintain.
We could focus on many trades, but I am particularly concerned about building trades. It was the tradition in Northern Ireland to have a surplus of building tradesmen. Indeed, many of them emigrated and moved to big cities in the United Kingdom. Today, we have a deficit and we are bringing in plumbers from Poland and elsewhere. I have no objection to that; I do not want members of the Committee to misinterpret what I am saying, but the reality is that we have people who are unemployed, but who could have been trained and who should have been trained. They could be put to work and allowed the dignity of a job, but our apprenticeship system is not working well enough for people.
If we are to move from less dependency on the public sector to more involvement in the private sector, we need a greater commitment. I notice that Department of Enterprise, Trade and Investment funding is slipping and sliding. Next year, we need much greater focus on preparation for work and the organisation of inward investment. I am not making political overtones or undertones, but we are sitting 100 miles away from a fairly successful economy in the Great Dublin region and the Irish Republic generally. We will have to compete there.
I know that Northern Ireland has problems with productivity and that ours is perhaps quite a bit lower than the rest, but I draw the Minister’s attention to the need for the corporation tax rate to be looked at. While I am fully aware of the many difficulties, that is the one thing that within four or five years would leave the Northern Irish economy—dare I say it—flying. Whatever the losses were in the short term, they would be rapidly recovered and would create a level playing field with the Irish Republic. Others have a different rate, but I should be happy with a similar rate of 12.5 per cent.
Extra moneys have been allocated to regional development We have a massive problem. We have tended at times to focus on water because of the contentiousness of such matters. However, serious infrastructure problems remain. I want to put on the record how I welcome it and say that we should all accept the good will that has been shown to us by the Government of the Irish Republic. Again, I urge that such action is not misinterpreted politically, but seen as a good will gesture that they are prepared to invest in some of the infrastructure in the border region and further afield if we want them to. They are making gestures in the right direction and I want our infrastructure to be improved much quicker. We need a coherent plan to make that happen. It is not enough to set aside money for it. We can set aside all the money that we like, but if the machinery and an active and aggressive plan are not there to ensure that the infrastructure is brought up to standard quickly, it will not happen.
I want Northern Ireland to reach a stage when it is sustainable. I want each child to have an opportunity of a real job. I want them to have the dignity of a real job and the dignity of economic independence. I thank the Committee for giving me the opportunity to make those few points. I did so because having looked superficially at the budget notes, I worry that we are not doing enough to encourage such results. We talk a lot about generating growth in the private sector, but there is not enough for us in the budget to give meaning to that aspiration.
6.34 pm
Mr. Hanson: I thank hon. Members for their contributions during this afternoon’s debate on the estimates. I remind them that we are debating the supplementary estimate for 2006-07 retrospectively and authorising a proportion of potential expenditure to be undertaken from 2007-08. We are not setting finally the budget for 2007-08. That will, I hope, be a matter for the devolved Assembly on its return, post 26 March or for me as Finance Minister, in the unhappy event that the Assembly does not return. Hon. Members’ contributions today, in terms of their priorities, can still be reflected on by both the Finance Minister here and/or in the Assembly in due course.
In the 15 or so minutes that I have got to respond to the debate, I want to try, broadly, to deal with the points that all hon. Members have raised. The hon. Member for Tewkesbury made various points. I pay tribute to his assiduousness in attending not just this debate, but debates on all Northern Ireland matters. He made the astute point that I have a team of civil servants backing me up, as Minister—as do my hon. Friends—but he does not. He is an assiduous Member of Parliament who undertakes work on many occasions, week in, week out, not just with me as Minister, but with my colleagues. It is a burden that he shares with dignity. Having said that, he knows that I disagree with him on a number of points. I tried to give him a gentle kicking earlier on expenditure to do with public spending policy, but we share the understanding that he works hard on these matters.
The hon. Gentleman rightly identified that the proportion of spending in the public and private sectors is a key issue. It is not the size of the public sector that is the problem, but the size of the private sector. It is important to grow the private sector. We have just published the regional economic strategy after four or so drafts, in discussion with the CBI, trade unions, local government and others. That is currently out to consultation. I hope that the hon. Gentleman and other hon. Members will consider that. I hope that we can, under the devolved Administration, finalise that document to look at how we can develop the private sector. A number of key areas, including skills, investment and infrastructure, will be needed to ensure that we improve the public and private sectors in Northern Ireland. The strategy will bring a lot of good. The investment strategy, particularly in infrastructure, will be a key factor in helping to support development in the areas that I have mentioned.
The hon. Member for Tewkesbury is right to say that economic inactivity is a key issue. We have higher levels of economic inactivity in Northern Ireland, which is partly explained by a number of councils, but we need to ensure that people—particularly many people who are currently on benefits—get back into work. The welfare-to-work programme, involving my hon. Friend the Member for Liverpool, Garston and myself inthe Social Development Department, is trying to undertake some changes to do that. That is a key issue. There is probably some common ground between us that I hope the Committee recognises in due course.
The hon. Gentleman mentioned affordability of housing, which will be debated in an Adjournment debate shortly. I have taken an interest in that. House prices are rising in Northern Ireland, as they are in other parts of the United Kingdom and the Republic of Ireland. We are trying our best to build affordable houses through the social housing programme and we are aiming for 1,500 or so houses per year. We have introduced the co-ownership scheme and considered a range of mechanisms for that. However, because of the difficulties, we have also put in place an affordability review, headed by the former head of the civil service, Sir John Semple, which reported in draft to me earlier this year. The final review will come out post the 26 March election and I understand that it will advance some suggestions that the Government need to consider to tackle those issues—not just in Government, but with the private sector, the housing market and the lenders, as well as the Housing Executive and social housing providers.
The hon. Gentleman mentioned the all-Ireland energy market, which is a source of positive collaboration between north and south. The all-Ireland market will help, over time, to address our high energy costs. The hon. Gentleman also touched on the regional rate and the rate burden. I accept that in April there will be a major change in the way that rates are calculated, but the Government have committed to restrict any increases in rates next year to 6 per cent. Obviously, the final rate depends on the one set by the local councils, but we have given a commitment to maintain the regional rate at a 6 per cent. increase.
The hon. Gentleman finally mentioned tourism.
Mr. Robertson: I am grateful to the Minister for giving way. I asked whether the change in the rating system is revenue neutral. He has said on many occasions that it is, but the figures that he has provided me with in a written answer suggests that it is not.
Mr. Hanson: I have always said that the changes are revenue neutral, and I stand by that. I will examine the figures again for the hon. Gentleman, and write to him.
The hon. Gentleman mentioned tourism, which is important. One of the benefits of the political peace process has been the growth of tourism in Northern Ireland with a 13 per cent. increase in visitor numbers in 2005, and £354 million generated in the local economy. There are some great sites in the constituencies of all hon. Members who are present today. We want to work on that.
The hon. Member for East Antrim referred to the economic package from the Chancellor. I know how important that is to him and others in relation to the devolution process. Following a meeting before Christmas, the Chancellor indicated £35 billion of expenditure over the next four years and £18 billion of capital over the next 12 years. He will meet the political parties after the election, and I am sure that that will be discussed. The definitive figures for Northern Ireland are higher than those for Scotland and Wales now, and the capital and revenue have increased for the next four years. There will be debate about that, but the Chancellor has an important point to make. He is the right hon. Member for Kirkcaldy and Cowdenbeath, and I want to put that on the record so that when he reads Hansard he will know what his constituency is.
The hon. Member for East Antrim also mentioned water, and we had a long debate about that. Given the time, I do not want to cover that now, except to say that £1.1 billion is due to be invested over the next five years. That must be paid for somehow and the Government have decided to raise that resource by £300 million a year. There is a debate about that, but competence lies with the Assembly, and I hope that it will examine those matters in due course.
Elections take place not just during election periods, but throughout the year, and it is important to represent constituents throughout the year. The hon. Member for East Antrim mentioned several key issues in his constituency, including the A8 Belfast-Larne road. The Roads Service published a consultation paper on the possible extension and development of new road schemes. The A8 Belfast-Larne road has been identified as a possible scheme. No final decisions have been made, but I hope that they will be very shortly, under a devolved Administration.
The rolling stock on the Larne line and options for future train services is another issue that is being considered. An interdepartmental steering group has been established to consider investment in rolling stock and the rail network. The Under-Secretary of State for Scotland, my hon. Friend the Member for Inverclyde, is leading that, and will consider the issues in more detail.
I accept fully the points that the hon. Member for East Antrim made about the need to invest in infrastructure in terms of capital not just in schools, but in roads, rail stock and other aspects of infrastructure. That is the whole purpose of the regional economic strategy, and identifies a number of economic infrastructure projects necessary to improve and step change Northern Ireland’s economy. I hope that that will be considered in detail and commented on.
The hon. Member for Argyll and Bute raised a number of points, which I shall try to answer in detail, so I hope that he will bear with me. He identified extra money to the Department of Finance and Personnel, which undertakes functions on behalf of a number of Northern Ireland civil service departments, and that is reflected in some of the estimate provision. It is not all DFP resource; it is sometimes resource that is allocated by DFP for other aspects of Government expenditure.
The hon. Gentleman mentioned the £1.6 million reduction in air, sea and ports. That mainly involves slippage into 2007 of the work schedule for Warrenpoint harbour in Northern Ireland. That slippage is due to clearance from the European Union on state aid issues. I hope that that clarifies the point.
I know that the Ballycastle to Campbeltown ferry service is of great concern to the hon. Gentleman. Campbeltown is in his constituency, and all politics are local. My colleagues in the Department of Enterprise, Trade and Investment have worked with Scottish executives to try to find a viable solution to the problem. The hon. Gentleman knows that that has not been easy, and today there has been no resolution of the issue. The challenge for us in the current financial climate is whether we put £1.5 million, plus inflation, into subsidising that ferry for the next five years at a time when there are other demands on the public purse. The decision of the current Administration is, “No, we can’t.” The decision of a future Administration may be, “Yes, we can,” but that will have to be examined in terms of affordability for the public purse.
The hon. Gentleman mentioned the Civic Forum. The Civic Forum’s costs have plummeted for the simple reason that it mirrors the Assembly, and the Assembly has not met for four years in any meaningful form. Therefore, the Civic Forum is not an issue that is dealt with in relation to the expenditure that we are discussing. In the event of the Assembly reconvening, the Civic Forum—a commitment of the Good Friday agreement—will be reconstituted. The resources will be provided and that cost will be borne as part of the future estimates, rather than the historical estimates. The money is not there simply because the body has not met.
The hon. Gentleman mentioned water reform and the £3.45 billion estimate provision needed to facilitate the creation of the water company GoCo. The Department for Regional Development will transfer the assets and liabilities of the Water Service to the new Government-owned company GoCo by means of a transfer scheme, which is provided for in the legislation being undertaken. The estimate provision therefore reflects the fact that the assets and liabilities are transferred on the establishment of the company shortly. It is a technical, non-cash adjustment, and I hope that that answers the point. As of 31 March 2007, the carrying value of Water Service fixed assets will be in the region of £6 billion.
My hon. Friend the Member for Ealing, North raised a number of valid points regarding capital investment re-profiling. In simple terms I can say to him that the estimates that he referred to are for 2006-07 and we need to have parliamentary approval of changes that have been made in the estimates that were originally approved by the House of Commons before the estimate came forward today. The purpose of the supplementary estimate is to seek Parliament’s approval of the changes that have been made over the past 12 months. As ever with any Department, changes are made in the course of the year because sometimes projects slip, sometimes other demands arise and sometimes things happen that are special pressures in the course of the year. That is all monitored by the departmental Minister and centrally by the Department of Finance and Personnel. The changes and the re-profiling are essentially for the purposes of audit of expenditure being addressed in a positive way.
The hon. Member for Strangford raised a number of points. I have already covered a couple of points for her on intensive care costs. She mentioned police services for Northern Ireland. That is a non-devolved matter. I cannot go into it today, but I will examine it separately. She mentioned autistic spectrum disorder. The Department of Education, in conjunction with the education and training inspectorate, is preparing a strategy for autism based on the action plan produced by the five boards. I hope that that will be forthcoming shortly.
My hon. Friend the Member for North Down—I call her that because of her votes in the Lobby to support the increases in expenditure—raised a number of points. I accept fully the points that she made about the historical nature of last year’s estimate approval and some of the changes. As I have explained, these are in-year expenditure issues. I want to focus, given that I am pressed for time, on the Alzheimer’s issue, because I know that that is of particular concern to her.
As the hon. Lady rightly said, the Under-Secretary of State for Northern Ireland, my hon. Friend the Member for Wythenshawe and Sale, East, said in July 2006 that we would look at a local assessment of the new NICE guidelines. We have now reviewed the local applicability of NICE guidelines and we have asked for locally based experts to examine the differences in Northern Ireland. We are currently examining all that information. I hope that we will be able to issue a determination on the NICE guidance as it applies to Northern Ireland by May 2007, which is a couple of months away. My hon. Friend is currently considering the local review, which will be informed by “Living Fuller Lives”, the Bamford review report. I hope that he will be able to make that decision locally.
The key issue remains the same as in Great Britain—not only affordability, but the impact of that level of drug prescription on Alzheimer’s disease generally. We are considering that in a local context and I hope that we will bring forward some suggestions locally.
The hon. Lady mentioned the Kilcooley estate, which is funded and supported by Northern Ireland Alternatives. Again, that is a non-devolved matter, but I have met representatives of that organisation this week to talk about the scheme’s operation and the protocol that I have brought forward, on which the Northern Ireland Affairs Committee has commented. I hope that we will at least be able to examine some issues with Northern Ireland Alternatives. We had a very constructive meeting this week.
My hon. Friend the Member for Belfast, South (Dr. McDonnell) raised a number of points. On capital investment in schools, I simply say to him that we have spent more than £1.3 billion on capital schemes over the 230 major works in the past seven years. I shall certainly consider his comments about the two primary schools that he mentioned. I shall refer them to my hon. Friend the Member for Liverpool, Garston, who I hope will respond to him on those issues.
Question put and agreed to.
Resolved,
That the Committee has considered the Draft Budget (Northern Ireland) Order 2007.

Affordable Housing

Motion made, and Question proposed, That the Committee do now adjourn.—[Mr. Michael Foster.]
6.52 pm
Dr. Alasdair McDonnell (Belfast, South) (SDLP): Thank you, Dr. McCrea, for affording me this opportunity to draw meaningful attention to what I consider to be a crisis of housing affordability in Northern Ireland generally and the city of Belfast in particular.
I must commend my hon. Friend the Minister for recognising the seriousness of the problem in the past year and appointing the former head of the Northern Ireland civil service, Sir John Semple, to carry out a review. I welcome that review. Given the findings of Sir John’s interim report last December, I am satisfied that he will effectively examine all the issues impacting on housing affordability. However, examination of the issues is not enough in itself; we require a firm commitment from the Minister and the Government that they will implement urgently all the recommendations that Sir John will no doubt bring forward in March to remedy the fairly drastic situation.
In preparation for this debate, I have reviewed many of the factors influencing housing affordability, and I shall briefly outline some of them. Demographic changes have had a significant influence on the housing situation. The 2006 population estimates from the Northern Ireland Statistics and Research Agency indicate that there has been a significant increase in our population, which now exceeds 1.7 million, representing 2.8 per cent. of the UK population. The formation of smaller households within that increasing population is an even bigger driver of housing demand. The current mean household size, estimated at about 2.52 persons, is projected to drop to 2.2 persons in the next 20 years. Increasing numbers of older people, more single parents and single person households and the increased incidence of relationship breakdown will all contribute to a demand for more small households. In overall terms the growth rate in the number of households in Northern Ireland is twice the UK average, and the Northern Ireland demographic structure includes the following significant features.
There is a declining number of children under the age of 16, who now make up 22 per cent. of the total population. Previously it was a much higher proportion. There is a growing number of people of pensionable age, now estimated at 17 per cent of the population. Approximately 106,000 people are aged 75 or more, representing 6 per cent. of the population. As I mentioned earlier, the average household size is 2.52 persons and falling, and more than 25 per cent. of all occupied dwellings in Northern Ireland are single person households.
Demographics are just one aspect. While they can be a driving force to changing the way we live and the size of our household units, the biggest single factor that we have suffered from in the past few years is house prices. Northern Ireland has experienced unprecedented house price escalation. The most comprehensive review of house prices in Northern Ireland is produced by the university of Ulster in conjunction with the Bank of Ireland and the Northern Ireland Housing Executive. For the third quarter of 2006 the overall average price of a residential property was £180,128. Compared with the same quarter of 2005, the average price levels were up by 32.1 per cent. The report stated:
“Evidence suggests that a key driver in the market is the high level of investor activity.”
I suggest that it would be better described as speculator activity. People are buying houses as an investment and turning them over a year or two down the road at a fairly handsome average profit of 32.1 per cent. in 12 months.
Another reliable source of information is the Nationwide house price survey. The survey just published in January indicates that the average house price in Northern Ireland is now £181,000. That compares with £189,000 for a home in England, £148,000 for a home in Wales and £137,000 for a home in Scotland. In Belfast, the house price increase during 2006 was 43 per cent. overall. The change in the past 10 years was 322 per cent. That tells us how much things have changed in 10 years—house prices have more than trebled. That makes it evident how difficult it is for somebody to get on the ladder at the bottom end and become an owner as a first-time buyer.
In the rest of Northern Ireland the percentage growth in the past year is reported as fairly similar: 36 per cent. in the north-east, 36 per cent. in the south-east and a little lower, 26 per cent., in the west. At 43 per cent., the Belfast price rise has been matched fairly well in most other regions, although it is a little bit off the boil in the west.
I wish to make it clear that the young people and their parents to whom I speak are nearing a point of despair. People have told me that when they hear news reports on the latest house price increases, they actually switch off the television. They cannot listen to it and do not want to know—it simply drives them even further into despair.
Aside from demographics and house prices rises, I wish to mention social housing as a driving factor. Since 1996, housing associations, funded directly by the Department for Social Development, have become the principal providers of new-build social housing. The Housing Executive continues as a social landlord, with a housing stock of approximately 96,000 dwellings, and is responsible for a range of identification and analysis of housing needs and planning. The Housing Executive stock currently represents 13.6 per cent. of the total housing stock in Northern Ireland. The housing association stock of 22,000 homes represents a mere 3.2 per cent. Private rented dwellings represent 9.5 per cent. and, worryingly, 5 per cent. of housing stock is vacant.
Waiting lists for social housing are a big issue. The common selection scheme was introduced in November 2000 to embrace all housing applicants and transfers who requested Housing Executive or housing association accommodation. Between December 2000 and December 2006, the number of applicants in urgent need and those in housing stress has increased from approximately 9,000 to approximately 18,000. In the same period the total overall number of applicants, as distinct from those in stress, increased from about 21,000 to 33,000. The proportion of those on the waiting list who are in housing stress has risen from 49.6 per cent. to 54 per cent. in three years. More than 50 per cent. of applicants on the waiting list are single persons and small adult families.
The progressive increases in the waiting lists are attributable to a range of issues, including the inadequate provision of new build social housing; the continued sale of Housing Executive properties to sitting tenants, reducing the stock available to others; the population increase that I mentioned earlier, including the rapid rise in the number of pensioners and single person households; higher market prices forcing potential first-time buyers to seek social housing; and significant numbers of immigrants seeking housing to rent, particularly young people from eastern Europe and the former iron curtain countries. Those all generate tremendous pressure on social housing. I could go on, but I think that I have made the point.
The revised, census-based model run in 2003 estimated that there would be an annual requirement for between 1,400 and 1,500 social dwellings a year. Between 2001 and 2005, only 3,800 of the required minimum 6,500 new social dwellings were started. We are meeting only slightly less than two thirds of the social housing need. With the continued selling of existing Housing Executive stock and the demolition of derelict stock at current levels, the review into affordable housing estimates that by 2025 social housing will house less than 11 per cent. of our total households, while at present it accommodates 17 per cent. So the waiting list for social housing, which has increased by 55 per cent. over the past six years, will continue to grow rapidly.
The Housing Executive has recommended that the annual social housing development programme should be increased to 2,000 homes a year. That was supported by Sir John Semple, who concluded that
“if anti-poverty is to be a priority of Comprehensive Spending Review 2007, then provision of sufficient social housing must inevitably be high on the priority list.”
I sincerely endorse that viewpoint, but I am of the view that the Housing Executive and Sir John are much too conservative and cautious in their call for an estimated 2,000 dwellings. Through my constituency office and staff, I am overwhelmed by the number of people in housing stress. There should be 3,000 homes to meet the demand. The situation might be particularly bad in Belfast. Belfast might have and need substantially more social housing, but such housing is needed throughout Northern Ireland, too. The Minister and the Government should recognise that the housing problem has become a crisis.
The Department for Regional Development strategy, “Shaping our Future 2025” sets out the strategic approach—
7.4 pm
Sitting suspended for a Division in the House.
7.18 pm
On resuming—
As Sir John Semple suggested in his initial findings, I, too, strongly suggest that we ask the Minister and the DRD to re-examine the 208,000 figure, because 220,000 or 230,000 homes might well need to be built by 2015.
The owner-occupied sector in housing is robust, at 70 per cent. of total or 490,000 houses. It has shown strong growth, but affordability is the crunch, and it has become an increasingly significant factor in Northern Ireland. The Housing Executive has a good affordability index, but it is modelled on the fact that up to 30 per cent. of household income must be available to serve as a mortgage if one is to be in a strong position to buy. Buyers need to begin at a reasonable interest rate—it should certainly be less than 6.8 per cent.—to get a 95 per cent. mortgage based on their household income and a 25-year repayment period and to have enough money to cover a deposit.
Between 2001 and 2004, purchases by first-time buyers declined in proportion to the number of houses turned over. In 2001, 60 per cent. of people buying houses were first-time buyers. By 2004, the level had halved to 30 per cent. That tells us quite simply that young people in their 20s were no longer able to take on a mortgage because house prices had risen so steeply that no houses were available. Whereas young people could previously have bought a house with £100,000 or £110,000, and houses were available across Northern Ireland and even in Belfast, that has changed. House prices have jumped and are now closer to £200,000, and incomes just do not suffice.
The private rented sector represents about 66,000 dwellings or 9.5 per cent. of total housing stock. There is heavy investor interest and the private rented sector is growing, largely because people can no longer afford mortgages and have to rent. That is almost self-defeating. We would all like everybody to be able to own a home, and we would like a situation in which the 15, 16 or 17 per cent. who cannot afford a home are housed in suitable social housing.
I should also like to make a point about vacant property. It is estimated that 35,000 houses are vacant—about 5 per cent. of the total housing stock. That level must be reduced, I suggest, to 2.5 or 3 per cent. We must cut it in two, and bring 17,000 or 18,000 of those houses into use.
Planning is a major issue, including lack of land and planning obstacles. We can complain about the planners all we like, but one of the problems with planners has been that they have been far too cautious in making land available for housing. There is now a shortage of land, and land prices are driving housing costs—not building prices but site prices. I can give an example just beside me, in the heart of south Belfast. A location for 10 houses and a couple of apartments was sold for roughly £380,000 a site—certainly for £350,000. That is scary, because when the house goes on top of that, it will not cost less than £500,000.
We urgently require the introduction into our planning legislation of the equivalent of section 106 to ensure that developers make provision for a proportion of social or affordable housing in new developments. That arrangement has worked well in England, where a number of social housing units are attached to any major development. We must ensure that when it happens, if it does, the developers are not then allowed to buy a bit of land in some out-of-the-way place and fulfil their social commitments there. They must be fulfilled right on the site.
I could go through a number of other issues that we need to deal with, but I have given an outline, and I think that the Minister has got the point. This is the biggest single issue aside from water rates—dare I say it—that I have met on the doorsteps during the past four weeks. I gather from his colleague, the Under-Secretary of State for Northern Ireland, the hon. Member for Inverclyde, that the Government will not budge on the water rates, so I would like to see some budging on housing affordability. We must be inventive to find ways and means of allowing young people who need homes on to the housing ladder. That could be done through easy access to owner occupation with better mortgage rates or whatever, or through social housing. We cannot rule out either. The crisis is there, and we have to deal with it urgently.
7.25 pm
The Minister of State, Northern Ireland Office (Mr. David Hanson): I congratulate my hon. Friend the Member for Belfast, South (Dr. McDonnell) on securing this Adjournment debate, which comes at the end of a long Northern Ireland Grand Committee sitting. He raises the important issue of affordable housing as it affects his constituents and the whole of Northern Ireland. The points that he raised are apt because of the consideration that the Government are now giving the issue.
The housing market, and by that I mean all parts of the market—social housing and owner-occupied and privately rented housing—has changed dramatically over the last couple of years. You will be aware, Dr. McCrea, from your constituency, as my hon. Friend is from his, that house prices have risen to a point where, in percentage terms, they are now among the highest in Europe. That causes a range of problems. It is a success for some, with the increased capital value of their property, but for others it causes the difficulties of affordability and of getting into the housing market.
The average overall increase in house prices since January 2004 is some 51 per cent., and a range of factors are involved. As my hon. Friend said, they include rises in land values and in house prices generally, and to a lesser extent the growing political stability in Northern Ireland, which is attracting investors into the private sector. Indeed, in Belfast we are seeing new tower blocks of apartments and flats, which are attracting people into the city for the first time in a long time.
For all those reasons—my hon. Friend put it in a very positive way—action needs to be taken. I and my colleagues in the housing division have commissioned Sir John Semple to carry out an independent review into affordable housing, one that will look at all the barriers affecting those seeking affordable housing across all housing sectors. Sir John was appointed in September 2006, and produced an interim progress report in December. He consulted widely and received more than 90 responses. I hope that he will produce a final report for me—or, as I always say on such occasions, for my successor—by the beginning of April so that we can consider some of the key issues on affordability.
In the absence of that final report, it is difficult for me to give definitive conclusions, but I have listened carefully to what my hon. Friend said about the general direction that needs to be taken. We need to reflect seriously, as will an incoming Administration, on the points that my hon. Friend mentioned. Sir John’s interim report included thoughts on a number of factors that I hope will alleviate the current situation and give Government policy makers thoughts on how to tackle the issue of affordability in the final recommendations.
I specifically asked Sir John to consider a number of issues, including the examining and planning of land use. It is important to consider how to make the planning system work better, and how we can support the delivery of more social and affordable housing as part of the planning system; I know that Sir John has consulted widely with planning and housing professionals and with lenders and house builders on that issue.
My hon. Friend mentioned empty homes, and I am keen to ensure that the review considers that question. They are an untapped and wasted resource, as is acknowledged in the Government’s sustainable development strategy. We need to make better use of our assets across the board, and we need to bring empty homes back into the housing market. Again, Sir John will consider that matter carefully. Indeed, the Hills review in England considered that very issue and is now pressing for a rethink on how existing stock can meet social housing need.
We need to consider the level of building of social housing at present, as my hon. Friend has pressed us to do. Our current target is to build about 1,500 units a year. I expect Sir John to press the Government harder to build more social housing, as my hon. Friend suggested. Although his target of 3,000 a year is noble, it is probably too ambitious for the Government. However, we need to consider that matter.
Northern Ireland has a stock of approximately 695,000 well maintained housing units. We have the lowest unfitness level of any public sector housing in the United Kingdom. The Government already have various initiatives in place to assist those in need of affordable housing, through physical, bricks-and-mortar measures and financial measures relating to sustainability. The housing development programme delivers about 1,500 units a year, which costs about £132 million per year with private borrowings. I have introduced the Housing (Amendment)(Northern Ireland) Order 2006, enabling the Northern Ireland Housing Executive, from 1 April this year, to integrate social housing development programmes with other operational programmes, including finding out how we can work with neighbourhood renewal, regeneration zones, action zones and community safety partnerships.
The co-ownership scheme is particularly important in helping to get people back into the housing market. We have considered those matters regularly. I recently reviewed the limits for the co-ownership scheme and I wish to consider that again in the near future. There will be a regular review of the levels of, and support for, co-ownership as a whole. Substantial assistance is available through the housing benefit system, assisting more than 132,000 in the private rented sector—about which my hon. Friend did not talk in great detail, but which is still important—which costs the Northern Ireland taxpayer £386 million a year. We need to improve the private rented sector as best we can. I am keen to look at improving tenants’ rights, addressing unfitness and improving disrepair. The Private Tenancies (Northern Ireland) Order 2006, which comes into force on 1 April, will give a great deal of extra support to ensure that tenants in the private sector have a proper, effective measure of support in the debate.
My hon. Friend is concerned about a number of issues. I am grateful for his giving me advance notice today in the Belfast Telegraph of some of the points that will be mentioned in the debate this evening. It is useful to have such insider dealing, which always helps. In that paper, he mentioned section 106 and how we can look again at new planning regulations to help support affordable housing. I have already said that we wish to consider that. Sir John’s final report will be published shortly. It will detail a number of positive measures that have been discussed with the planning service and the housing division to help gain a better understanding of affordability in Northern Ireland as part of the planning process.
My hon. Friend mentioned young people and the high cost of housing. Again, we can do significant things, and the co-ownership scheme is one such example. We need to examine what else we can do in the review. I do not wish to pre-empt the review, but it will contain opportunities to take further action.
Interestingly, as my hon. Friend mentioned, many current housing difficulties involve single people, and they comprise the highest number of people on the waiting list. Those are not just young single people. Sometimes they are older single people. There is a social fabric issue in terms of family split-up, divorce and partnerships breaking up, which is causing additional pressures on the housing market.
My hon. Friend raised a number of valid points on significant issues that the new Executive will have to address in the near future. I believe that the Semple review will focus on some of those points and the new Executive will have the opportunity to deal with those issues. There are no easy options; all of them—the social housing build, bringing on empty homes and revising planning applications—have costs attached. However, the private and public sectors need to work hand in hand to address affordability and access to the housing market, because if we do not, the social consequences of that failure will live with future generations and will add costs to the public purse in due course.
I commend my hon. Friend for his contribution. We will reflect on it. I look forward to receiving Sir John’s report in the near future and I thank Sir John for his work. I thank my colleagues in the housing division, and I particularly thank David Crothers, the director of housing, who will be retiring shortly, for his work on the review. I commend my hon. Friend’s suggestions to the future Executive.
Question put and agreed to.
Adjourned accordingly at twenty-five minutes to Eight o’clock.
 
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