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12.3 p.m.

Lord Prys-Davies: My Lords, my noble friend Lord Williams of Mostyn very much regrets that he is unable to be in his place this morning, due to a previous commitment.

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I should like to thank the noble Baroness, Lady Denton, for introducing the appropriation order with its range of figures, for her account of the main items of expenditure and her encouraging report on the economic background to the developments in Northern Ireland.

I believe I should not be going wide of the subject we are discussing if I were to say at the outset that the explosion in Canary Wharf three weeks ago which brought the IRA ceasefire to an end filled us all with disbelief and dismay. It seems to many of us that the clock went back that night. On the other hand, I believe that the message from the people of Northern Ireland right across the land is clear: they want the politicians to work towards a lasting peace and reconciliation. We were therefore immensely encouraged when the two governments were able to issue a joint statement two days ago. That statement showed a great deal of flexibility and contained elements which should have been acceptable to all parties. The statement sent out a signal of hope. As the Minister said, it is upon the expectations for peace that so much depends in Northern Ireland. However, the signals overnight from the IRA are sombre and it would appear that the reinstatement of the ceasefire is very much in doubt. That is the situation we are in.

I should like to hear from the Minister on the transfers which have been made during the past 12 to 15 months from the security budget to other budgets, such as those for economic development, health and social services. If the reinstatement of the IRA ceasefire is not likely to be imminent, do the Government intend to claw back any of the funds which have been transferred from the security budget to the economic, health and social services budgets? The stark fact is that there is horrendous dependence on the dole and social benefits in Northern Ireland. I believe it is agreed that to reduce this dependence should continue to be a central aim of government policy. The Secretary of State has been reported in the Belfast Telegraph as saying:

    "If violence resumes, this saving will have to be restored to the budget".
Can the Minister clarify at whose expense it will be restored, bearing in mind that, notwithstanding what the Minister said about the health vote, at least two of the health and social services boards are at present facing some financial difficulties, as is the ACE youth employment scheme? I do not overlook the personal difficulties of the 40,000 long-term unemployed in Northern Ireland.

Though I have been considerably reassured by what the Minister has said, is there any evidence that any of the international bodies are contemplating the withdrawal of funds if the ceasefire is not restored? If such a move were to be one of the consequences of a resumption of violence, it would be shortsighted. However, I believe the Minister assured the House that the European Peace Fund, for example, is secure. Is there any evidence that some overseas companies or municipality funds, such as the New York City Employee Pension Fund, are considering not proceeding with their plans to invest in Northern Ireland until the

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ceasefire has been reinstated? Surely the investment plans of overseas companies and large municipalities are more relevant than ever.

There is agreement, fully supported by Coopers & Lybrand, that the period of 17 months since the ceasefire has been one of the most successful periods for Northern Ireland in living memory. Clearly, the ceasefire contributed significantly to that achievement. That is not to belittle the admirable commitment of the Minister to the task of rebuilding the Northern Ireland economy. As the Minister said--I believe she touched on this in her speech this morning--we have to ensure that all the hard work of the past 17 months is not squandered.

I am conscious that it is Friday morning and therefore I have just a few specific questions for the Minister. They fall within the Minister's area of responsibility. We have all read of the worries at Short's, Ulster's biggest private sector employer. Those difficulties flow from the financial problems of its key customer, Fokker, the Dutch aerospace company. The loss of Short's would be a severe blow for Northern Ireland. My noble friend Lord Blease tells me that 1,500 redundancy notices have already been issued. No doubt that is no more than a precautionary move. However, that gives a stark indication of the size of the potential loss.

Can the Minister tell us how complex is the position as at today's date, 1st March? Can she give us any reassuring information additional to what we read in the newspapers? I am sure that it would be appreciated if the Minister could give an indication of when the company and its 1,500 employees may anticipate a firm decision on the company's future.

I have a question about Northern Ireland's largest single industry, agriculture, which is facing critical years. Compared with the huge investments referred to in the order, my question is relatively minor; nonetheless, it is important for rural Northern Ireland.

Last December the Scottish Secretary of State made an order, the Rural Diversification Programme (Scotland) Regulations (1995 No. 3295). That order was made under the terms of the European Community Act 1972. The regulations provide a range of small but useful measures for promotion of rural diversification. They provide for the payment of grants up to £25,000 to a legal occupier of an agricultural unit--I believe those are Scottish terms--to finance such measures on his land. I have a feeling that such an order would also be welcomed by the owners and tenants of agricultural land in Northern Ireland. Can the Minister say therefore whether the department intends to bring forward a comparable order for Northern Ireland in the near future?

My third point relates to an important growth industry--the tourist industry. The British and Irish Parliamentary Body, since its founding, consistently encouraged greater co-operation between the two tourist boards. One is pleased to say that that co-operation has been forthcoming. I was therefore particularly sorry that the two boards found it necessary, understandably, to postpone this year's joint advertising campaign in Britain because of the breakdown of the ceasefire. Can the Minister tell the House whether that campaign can be reinstated at short notice?

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As the Minister said very eloquently, the past 17 months has been an excellent period for inward investment in Northern Ireland. However, I have read that it is claimed that there is a worrying gap between promise and achievement on the part of the IDB. Can the Minister clarify the position? Is there or is there not a gap of some 4,000 or 5,000 between the number of jobs promised by the IDB (and part-financed by the IDB) and those achieved in the year 1994? If there is a gap of that order, why should that be the case? On the other hand, if there is no gap, is the Minister satisfied that there are no additional ways in which the IDB can be made to function successfully in Northern Ireland?

With those few questions I am pleased on behalf of this Front Bench to give our approval to the appropriation order.

12.15 p.m.

Lord Meston: My Lords, I join in thanking the noble Baroness for her introduction of the order and state the obvious; that is, that it is only the unavoidable absence of my noble friend Lord Holme of Cheltenham which finds me here.

The economy of Northern Ireland has undoubtedly been transformed over the past 18 months. While there has been an uncertain recovery in the rest of the United Kingdom, the recovery in Northern Ireland has been more substantial--I understand some 13 per cent. more so. Business confidence rose as the political situation developed. Many more overseas investors have become aware of the latent opportunities in the north and consumer spending has risen sharply, largely because of people travelling from Britain and from the Republic.

The present is promising and the future looks even brighter. However, we are not yet out of the woods. Unemployment is falling and is lower than it has been for many years. but it is still worryingly high. It is higher than in the rest of the United Kingdom by some 3 or 4 per cent. and a much greater proportion of that unemployment is endemic. More than half of those people are long-term unemployed. If the order can help those people, it will have a disproportionately beneficial effect on the economy of Northern Ireland.

Unfortunately, I see that help for the long-term unemployed was cut severely. The Action for Community Employment, to which the noble Lord, Lord Prys-Davies, referred, is facing a cut of one quarter of its overall value. Up to 3,000 jobs may be lost, and those are jobs that can reach the long-term unemployed and strengthen the fabric of the community. The Minister may say that government funds are creating jobs elsewhere and that the private sector created some 11,000 jobs, which is both impressive and welcome. But that will not convince the community worker in the Shankhill or the Falls. I understand that the cuts in this scheme went down badly in Northern Ireland. If the Government have a case, they have some explaining to do; if not, then the cut is a false economy of serious magnitude.

I understand that the amount allotted to education for the coming financial year rose again, which is welcome. But the rise is small and insufficient. Education Vote 1

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spending has risen by 3 per cent. over three years amounting to marginal increases above the amount required to keep pace with inflation. I understand that there is anecdotal evidence that education in Northern Ireland is in need of a boost. On these Benches we would like to see much of that boost directed towards integrated schools, which have done a great deal of good in Northern Ireland and must be supported in their efforts. Schools considering integrated status need financial backing to encourage them to make the break and gain integrated status, with all the difficulties and awkwardnesses that inevitably follow in the short term. But that point is not confined to integrated schools. Education generally, in most sectors and most schools, is as short of money in Northern Ireland as it is in the rest of the United Kingdom.

Finally, perhaps I may make a brief comment about agriculture, which is by some measures three times more important to the economy of Northern Ireland than it is to the economy of the rest of the United Kingdom. I understand that the Vote 2 sum granted has fallen again, as it has done now for several years. I ask whether there is some plan behind this reduction. Is there some way in which this figure is falling but agriculture is somehow better off? I suspect that that is not the position; in which case I should like to know why this sum continues to be cut, and cut so substantially. I conclude by joining in paying tribute to the work of the noble Baroness the Minister.

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