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Baroness Farrington of Ribbleton: My Lords, I wonder whether it assists the noble Lord, Lord Cooke of Islandreagh, if I correct a minor point? The debate is

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not time limited. I am not inviting noble Lords who have yet to speak to do so at great length; but it is not a time-limited debate.

Lord Cooke of Islandreagh: My Lords, I thank the Minister for pointing that out. However, 12 minutes was probably reasonable enough given the short time available.

8.12 p.m.

Lord Holme of Cheltenham: My Lords, I shall not be affected either in length or brevity by the instructions given by the noble Baroness. I thank the Minister for the clear terms in which he presented the order. Perhaps I may say what a pleasure it is in this rather select group of us who deal with Northern Ireland business to follow the noble Lords, Lord Molyneaux and Lord Cooke, who have intimate knowledge and experience of events in Northern Ireland. In particular, the questions on agriculture, which both noble Lords asked, and on power costs, which the noble Lord, Lord Cooke, has pursued tenaciously for some years, deserve serious answers. I hope that they will receive them. Both issues are fundamental to the economy of Northern Ireland.

As the Minister said, this should be, and we all hope is, the last time we deal in this detail with the budget of Northern Ireland. However, it is a particularly important occasion. The order sets the baseline for the first budget of the new dispensation in Northern Ireland, both in the quantum of expenditure and the departmental divisions. If I heard aright, I believe that the noble Lord, Lord Molyneaux, called the executive "exotic". It is dangerous for Members of the House of Lords to call any other institution exotic, but let us accept his description. The new executive in Northern Ireland, wrestling with these problems for themselves as Ministers for the first time--albeit within the constraints of the Treasury--will, I am sure, take our discussions tonight as a baseline from which to make their changes. In that sense, the order is important.

When the new assembly discusses the budget next year, I hope that the occasion will be better attended; I have no doubt that it will be. That is the great justification for moving to devolved powers in Northern Ireland: the issues we are discussing tonight are best discussed closer to the people affected by them. They can make the important political decisions relating to those issues.

I have some specific points about which I wish to ask the Minister. My calculation suggested that the education budget had been increased by 2 per cent. I accept that the mathematics of the Minister and his officials may be better than mine. I believe that he gave a figure of 3 per cent. after certain factors had been taken into account. However, I do not find encouraging an increase of 3 per cent. in the education budget as the baseline for future years. We are all agreed that Northern Ireland has one of the best education systems in the United Kingdom. We have to keep it that way. It needs to be improved upon.

We know that the comprehensive spending review is under way. I sincerely hope that we shall see a more generous increase in the education budget in Northern

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Ireland. I hope that that will come before too long. It is crucial that as Northern Ireland, we all trust, reverts to the characteristics of a normal civil society the skills conferred by education are the Government's first priority.

I welcome also the fact that more provision has been made for integrated education. As the Minister knows--I have persecuted him and his predecessors on the subject--it is important that in the process of arriving at an accommodation between the two main traditions in Northern Ireland (I trust that we are in the process of doing so) the demands of integrated education which cut across those two traditions are not squeezed out. All the evidence indicates that integrated education makes a significant contribution to people's perceptions of the other community with whom they share Northern Ireland, and is not merely a good way of being educated but makes a contribution which is much needed. The demand by parents and pupils in Northern Ireland still exceeds the supply. I hope that the Government will continue to increase in real terms the budget for integrated education, as they have done this year within an education budget which in real terms has stood still.

The noble Lord, Lord Cooke, spoke interestingly about the economy. There is a danger in taking the current improvement as a permanent condition. We know that the Northern Ireland economy is still disproportionately dependent on government expenditure of one kind or another. We all wish for the Province to have a more robust and less dependent economy. The key is inward investment. I was glad of the tribute made to the noble Baroness, Lady Denton. I am glad to see the Government continuing their efforts to attract inward investment. But inward investment is affected very much by the political atmosphere.

I do not wish to hijack this evening's proceedings by talking at any length about what is happening this week at Drumcree--we should be careful in measuring our words, as the Prime Minister and leaders of the Orange Order were after their meeting today--but I hope that I may be allowed to say this. Every day of bloody-minded intransigence, every burning tyre in Northern Ireland, will quite literally cost us the loss of thousands of visitors. That will cost the Province millions of pounds in investment. It is a matter of the lifeblood of Northern Ireland. The more those people think it is a "Saturday night special", a chance to show off, a chance to indulge themselves, the more I hope they reflect on what it means for the well being and the prosperity of themselves and their families, and the more I hope that it will restrain them at this sensitive time.

Finally, as other noble Lords have done, I refer to the curiously precise figure of £9,277,000 for the new Northern Ireland assembly. I wonder what the last £7,000 is for. Could it be for simultaneous translation from Irish into English in the new Northern Ireland assembly? I am told that that is very much needed because not all the Irish speakers speak Irish that well and therefore, it is extremely important that there should be some measure of translation.

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However, let us take that figure of just over £9¼ million. If that is the expenditure on the assembly, where will the other elements of expenditure to enact strands 2 and 3 of the settlement be shown? In which budgetary account shall we see those? No doubt the costs will be smaller than those of the functioning assembly, but I should like to know how they will be budgeted for. Nevertheless, if we can turn the corner of the next week or two and see the assembly working effectively in the autumn, £9 million will be cheap at the price.

8.20 p.m.

Lord Cope of Berkeley: My Lords, although the words a few moments ago from the noble Baroness have loosened my inhibitions as regards making a long speech, I do not intend to delay your Lordships long.

As the Minister said, this order is part of a procedure which we may not need to carry through again in this form. That is extremely welcome on two counts. First, it is welcome because we all hope that the new assembly and the agreement generally can overcome its present troubles. I support in general the remarks which the Minister made about the present situation in the Province, and certainly the effects on the economy are deep and profound, as the noble Lord, Lord Holme, has just said.

The second reason for welcoming the end of this procedure lies behind what the Minister said. Another procedure might work better for probing these figures and expenditure. In such an order, the figures are difficult to follow, even for those, like myself, who have done their best to follow them for quite a number of years in different formats. The figures which the Minister gave in his speech are extremely difficult to relate to the figures which appear in the order. That is in no way the fault of the Minister and I do not suggest that for a moment. It is in the nature of the process. However, it caused me to wonder whether the Minister can tell us anything about how in future those figures may be presented for the part which will remain our responsibility in this Westminster Parliament, even if everything goes smoothly as regards evolution.

I was encouraged that in the recent report by the Chancellor of the Exchequer he was carrying forward the work on resource accounting which was being undertaken in the Treasury while I was there, and to which I made my contribution, in order to reach a situation in which the Government can publish and Parliament can consider in a more meaningful manner the way in which expenditures are divided up, set up between different departments and also between capital and current expenditure. Is it the Government's intention, and in particular the intention of the Northern Ireland Office, to publish figures which will help us and in due course the new assembly as well to fit the figures which we are voting through with the total government expenditure under the different headings?

It would be extremely helpful. It would make the sort of decision which we are taking this evening and all the decisions on finance and expenditure much more like

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the decisions taken by the members of an ordinary board of directors, for example, in being able to see what it is that the company proposes to spend in the different areas and decide whether or not they agree with them.

In his opening remarks, although it does not arise precisely out of the appropriation order, the Minister referred to the transfer of the Port of Belfast to the private sector. It will not surprise anybody to know that I support the principle of privatisation. I know that in England certainly port privatisation has proved extremely effective. The Port of Bristol, near where I live, has proved an outstanding example of the effect of privatisation, although in that case the port was owned previously by the city council.

However, I am aware also of some of the special factors in the particular privatisation of the Port of Belfast, which I visited on previous occasions and learned a bit about during my time in the Northern Ireland Office. The Minister may be able to tell me this evening to which part of the public purse it is expected that the proceeds which will accrue from the sale of the port should be credited. It makes a difference because in future there will be two blocks of expenditure--the block including all the matters which we are discussing this evening being controlled by the new Northern Ireland assembly and the new executive, and Her Majesty's Treasury will be leaning over all as usual. It is important to know which part of the public purse will benefit from the sale of the Port of Belfast.

It was claimed, not unfairly and not necessarily prejudging the questions I have asked, in the recent Command Paper 3978 on economic and fiscal strategy that it was included as part of the benefits to the government as a whole. But it due course it will be important to know whether it is assisting Northern Ireland itself where investment is, as other noble Lords have said, so important. Having said that, and with that one particular example, I support the order.

8.26 p.m.

Lord Dubs: My Lords, I am grateful for the positive and supportive comments and contributions which have been made throughout the debate. I turn first to the question asked by the noble Lords, Lord Molyneaux and Lord Cope, about the new arrangements which will be put in place for these matters when the Northern Ireland assembly is functioning fully. The Northern Ireland Bill, which is to be brought before the other place before too long, will make provision for the financial arrangements under which the new Northern Ireland assembly will operate. It would be inappropriate for me to go into more detail at this stage but your Lordships will have ample opportunity, when that Bill comes before this House, to consider the details of how that new assembly will operate as regards financial control.

The noble Lords, Lord Molyneaux, Lord Holme and Lord Cooke, asked about the crisis facing the pig industry. I have had more than one meeting with representatives of the industry to discuss the difficulties facing pig producers not only because of the depressed state of sterling, which affects other parts of the United Kingdom and therefore is not just a Northern Ireland

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issue, but also the particular difficulty after the destruction by fire of a pig meat processing plant in Ballymoney and the effect that that might have on the ability of pig producers to bring forward their animals for processing. That is an immediate difficulty with which my department has been grappling, as has my honourable friend the Minister of State in his responsibilities for the DED and therefore for the future of a possible plant to be constructed, given that the present one has been totally destroyed by fire. That is a short-term difficulty.

The other issues which arose as regards pig production are difficult because the European Union does not make it easy for us, even if we have the money available, to provide the sort of support which we are permitted to provide in other sectors of the agriculture industry.

I should like to write to noble Lords on the point about stalls and tethers because there is a very specific issue involved. The Government's position on animal welfare is a sound one and we do not particularly want to abdicate that position. I appreciate that some of the pig producers may find it difficult to adhere to the new arrangements; but, on the other hand, they have had eight years' notice that the Government intended to introduce them at this time. Therefore, I do not want to give the impression that we will somehow change the policy. But certainly there are some specific points about compliance by other EU countries which I should like to consider.

As regards the point about meat and bonemeal, there is a real difficulty here because, after all, we have been down this path before on the question of the BSE crisis in relation to beef. I do not think that we can go back to a policy--indeed, the noble Lord did not suggest it--where we allow meat and bonemeal to be used as animal feed. However, I appreciate that it makes the playing field less level than it would be in an ideal world. I shall address the matter in letters, if I have not dealt with any other points that have been raised in that respect.

The noble Lord, Lord Molyneaux, also made a number of comments about various DoE matters. I have to tell him that this Government have no plans to split up the DoE. If that is the wish of the Assembly, then that will be a matter for it to decide. However, we have no plans to split up that department. Clearly the Assembly will need to consider the structure of Northern Ireland departments. As I said, that is a matter for the Assembly and not one for this Government.

I should also tell the noble Lord that the difficulties he said had occasionally arisen as regards an imbalance between housing developments and lack of adequate water or sewerage services is something which I hope will not arise again. Certainly, in the broader context, the regional strategic framework will be looking at these issues, although I appreciate that this may be a matter to be resolved in more detail than that approach is susceptible to. Nevertheless, I hope that that is not a difficulty that will arise again and that housing developments will move in line with additional water and sewerage services where these are necessary in any particular area.

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As regards the particular situation at Glenavy--an area which the noble Lord knows well--the water service has planned a new treatment works which will have double the design capacity of the current works from a population equivalent loading of 500 persons to a thousand. Site acquisition has held back the scheme, but it is now scheduled for commencement at the end of this year with completion in 1999.

The noble Lord, Lord Molyneaux, also referred to the difficulties as regards toilet facilities at Ballycarrickmaddy Primary School near Lisburn. That is a controlled school and, as such, responsibility for toilet and other provisions for the school is a matter for the South Eastern Education and Library Board in the first instance. However, the need to replace the existing premises is acknowledged. The board has recently commenced the planning of a new school. When planning is sufficiently advanced, the school will be considered for a place in the capital programme in the light of the resources available to the education service at the time. The board provided a mobile toilet block, including a toilet for the disabled, at the school three years ago.

The noble Lord, Lord Cooke, and, I believe, the noble Lord, Lord Holme, were concerned about the general difficulties facing farmers in Northern Ireland and the fall in farming incomes which has taken place over the past year or so. I concede that there has been a fall in farm income. Part of the difficulty has arisen from the strength of sterling over the past two years. However, I have to say that all exporting industries have suffered from the strength of sterling. The difficulty is not unique to agriculture, although I accept the point made by the noble Lord, Lord Cooke; namely, that, given the large amount of beef previously exported from Northern Ireland--a market which we are hoping to regain in the coming period--there has clearly been a particularly adverse impact on Northern Ireland producers who are exporting or who seek to gain or recover export markets in the future.

However, my right honourable friend Dr. Cunningham announced two packages of compensation for agriculture on 22nd December and on 3rd February, which I hope have gone some way towards helping farmers, or some farmers, to cope with the very difficult situation that they are in. As regards the question of the Republic of Ireland and its ability to gain money from the European Union, I should point out that the real difficulty is that we are a net contributor to the Union, while the Republic of Ireland is a net beneficiary. Some of the difficulties stem from our being a net contributor. Therefore, as regards some of the money which might be available through Brussels, a large proportion of money from the Treasury is also required in order to match the European money. That has been a difficulty that we have had to face for some time.

The noble Lord, Lord Cooke, talked about difficulties facing the textile industry. It remains a very important sector in the Northern Ireland economy providing some 25 per cent. of manufacturing employment. Of course, there are intense competitive pressures from the low-cost economies and the recent devaluation of some Asian currencies has added to those pressures. However, investment in industry in Northern Ireland continues. In

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1997-98 companies created 900 new jobs. Since March, there has been an investment of £8 million in four projects attracting £1.5 million of IDB support. The latter anticipates further job-creating projects in the sector.

The noble Lord asked about the West Link. Yes, the roads programme provides for the commencement of a first-class and overall scheme in the 1999-2000 financial year, with the main element of the work commencing in the following year. That is the earliest start date following the completion of the statutory processes. I agree with the noble Lord that this particular project would very much help in dealing with the cause of enormous delays for motorists, especially for freight traffic going to Belfast harbour. Indeed, that is an important element as regards the competitive position of the harbour.

The noble Lord, Lord Cooke, also talked at some length about the higher electricity costs facing industry in Northern Ireland and the fact that generator costs are 43 per cent. higher than they are in Great Britain. Government policy is to reduce the cost of electricity in Northern Ireland, both to industry and to the domestic consumer. That will be achieved through the introduction of greater competition as regards the energy market. The regulator is already in discussions with Northern Ireland Electricity and the generators on possible ways of reducing generation costs. A progress report by the regulator in February 1998 confirmed that voluntary agreements had been reached on revisions of the power station west and Coolkeeragh contracts and held out the prospect that proposals being developed by the generators in respect of the Ballylumford and Kilroot contracts could also deliver the required benefits. A further progress report is expected in the autumn. If satisfactory voluntary agreements on changes to the contract cannot be reached, the regulator may decide to refer the matter to the MMC.

The noble Lord, Lord Cooke, also asked about payments to victims. There is provision for payments to victims as announced by the Government, but that is not to be contained in these estimates. That will be contained in estimates, which will be brought forward next spring in the supplementary estimates. Therefore, those figures as regards provision for victims will be seen at that time.

The noble Lord, Lord Holme, asked about the increase in education expenditure. The advice I have received shows that, on the basis of like for like, public expenditure on education will be £52 million higher in 1998-99 than in 1997-98, excluding the EU peace-package provision. That represents a 4.2 per cent. increase over the provision for 1997-98 inherited from the previous administration. Therefore, it is better than the figure that I quoted; in other words, if one compares like with like, the figure comes out better. I give way to the noble Lord.

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