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Lord Blease: My Lords, I welcome the opening statement by the Minister, especially her hope that peaceful trends will prevail. The people of Northern Ireland earnestly seek, with honour, trust and good will, to establish a form of government as set down for the Assembly.

Although it is a matter that is outside the Minister's control, I should have preferred the draft order to have been duly tabled and considered by elected representatives in another place first. However, the opening statements have been very constructive and positive.

I find it difficult to accept this appropriation order in the light of years of experience on the Opposition Benches in dealing with expenditure and the various developments that took place.

It is necessary to refer to three documents. The first is the Northern Ireland Act 1974 which sets out the background and shows why the appropriation order had to be presented at this time in this manner. In relation to expenditure, it is necessary to look not only at the appropriation order but also at the Northern Ireland Spring Supplementary Estimates 1999-2000.

There are two matters that touch on the point of principle that I should like to develop. Paragraph 12 on page 7 relates to expenditure on education in schools. We see there a figure of £53 million, which is a decrease of approximately £68 million. I looked at the Supplementary Estimates to see why that reduction has taken place. On page 45 the reduction is stated to be mainly due to a reduction of planned spending of £4 million as the result of the non-availability of receipts from the sale of the Belfast Port. The Minister has already referred to that point.

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Paragraph 5 refers to a reduced requirement of £5 million-plus being mainly due to a reduction of planned spending of £2 million-plus as a result of the non-availability of receipts from the sale of Belfast Airport; a transfer of £2 million to sub-head (2) for education technology, and a reduced requirement of £24,000 in respect of the Making Belfast Work Initiative. Why has that situation arisen? Is it sound or practical to build a budget on that basis?

Page 9 of the appropriation order deals with expenditure for the Northern Ireland Assembly. It is an increase on the original estimate. In the Northern Ireland Spring Supplementary Estimates on page 79 approval is sought for various changes in relation to additional staff salaries and recruitment costs of over £600,000; additional Members' and office holders' salaries of £500,000; a party allowance of £400,000; and road, security, cleaning and catering costs of £1.5 million.

I do not understand how those figures can be presented at a time when Northern Ireland is trying to fulfil the housing, transport development and educational needs of ordinary working people.

I do not wish to close the door on a sad note or a highly critical note. I know that the Government have tried to deal with the affairs of Northern Ireland in a liberal manner. But at the same time, this appropriation order requires acute examination that cannot be done in one sweep in this House.

I thank the Minister for the way in which she presented the order. The burden she carries in this connection would be much less if it had been presented in the other place first, instead of in this House.

Lord Dubs: My Lords, I share my noble friend's regret that we are debating this order at all. We hoped fervently that these matters would stay with the Assembly in Belfast. I feel also that this procedure is not entirely satisfactory, even if we have to conduct the business here. Frankly, noble Lords asking questions, which are answered by the Box passing messages to the Minister or the Minister writing in response, is not the best method of dealing with these matters. I am sure that a better procedure could be devised, though we hope that we shall not have to deal with appropriation orders in the future. There are better ways in which to debate these matters, ask questions and obtain the answers than this cumbersome way via secondary legislation.

I have sympathy with the points made by the noble Lord, Lord Molyneaux, in relation to the state of Northern Ireland agriculture. This is not necessarily the appropriate time to debate those issues, but I share his concern about the dreadful situation facing farmers, including the hard-hit pig farmers, at the present time. I am not sure that there could be much in this appropriation order which would make a difference. As the noble Lord suggested, we must look to Brussels and possibly even MAFF for some easement, not to decisions made in Belfast.

I should like to raise a few issues, one or two of which have been referred to, which underlie some of the figures that we have been debating this evening.

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The first concerns the difficulties as regards Belfast Harbour. I wonder whether my noble friend can throw a little more light on the timing as regards the plans to privatise the harbour, which have been somewhat delayed for reasons some of which I am familiar with and others which have arisen more recently. But they cast a dark shadow over any spending plans in Northern Ireland because it meant that some items of expenditure had to be deferred on the assumption that the harbour will be sold before too long. Perhaps my noble friend can say something about the assumptions underlying the failure so far to make much progress in selling Belfast Harbour.

Secondly, and importantly, it is likely that Belfast Harbour is worth a lot more than the £70 million that we have been discussing. Although I am sure that my noble friend cannot give any assurances from the Front Bench today, I hope that when the harbour is sold for a sum in excess of £70 million, all that money will stay in Northern Ireland; that the Treasury will not get its hands on the difference between £70 million and the amount the harbour fetches and claw it back. The wealth of the harbour comes from the efforts of people in Northern Ireland--their industry, commitment and hard work. It is only proper that wealth created in Northern Ireland should stay in Northern Ireland for the benefit of the people of Northern Ireland. My noble friend probably cannot say much about that and I do not want to tempt her into a discussion about it. But that needs to be said for the record.

As I understand it, one consequence of not having that £70 million--or whatever greater sum it might be--is that the roads programme has not proceeded as we hoped following the Chancellor's initiative a couple of years ago. Perhaps my noble friend can say a little more about what happened to some of the road schemes which were so eagerly sought after by district councils and others throughout Northern Ireland and which I suspect now have had to be delayed.

My noble friend referred to the costs of the Assembly. I hope she can assure us that in the figures for next year we assume that the Assembly will be going from the beginning, and that we are not writing into the figures any assumption about savings through the Assembly not functioning. The message that has to go out and that has gone out through some of the speeches this evening, is that we want the Assembly back in operation as soon as possible and therefore we do not want to look at savings which may make it more difficult for the Assembly to get restarted.

I have a few other points that I want to raise briefly. One concerns the water industry and capital expenditure on water and sewerage in Northern Ireland--an area which has seen too little spending over many years. I should like an assurance that the high levels of spending envisaged will go on being achieved in so far as this is not a matter that will go back to the Assembly in Belfast; in other words, that we are working on the assumption that the higher levels of spending will taker place whether it be from public expenditure or income from the regional rates.

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My next point concerns public transport, again an area which has been under-resourced for a long time in Northern Ireland. Can my noble friend say anything about the needs of the railways and the buses and whether they can be met by some further increments in public expenditure, public-private partnerships or through PFI? Is there any difficulty in applying PFI? Is there a legislative basis for it? It is a matter of seeing by what combination of means further capital spending can be achieved in both the railways and bus services of Northern Ireland.

Lastly, I want to raise a point about which I failed to give my noble friend notice earlier as I did with the other points. St. Angelo Airport was mentioned. Can she say anything about the plans to develop Londonderry Airport? It is much needed. I am not aware of what the latest position is but I know that some contribution has been made from the Republic. It will make an interesting and helpful package for the economic development of the north-west of Northern Ireland and indeed of Donegal. If my noble friend is not able to give me the answers today, perhaps she will be kind enough to write to me.

8.15 p.m.

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

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

The noble Lords, Lord Molyneaux, my noble friend Lord Dubs and the noble Lord, Lord Glentoran, also raised the issue of the crisis in the pig industry. We recognise that that industry is facing difficulties across the UK. I can assure the noble Lord, Lord Patten, that the whole Government, including my right honourable friend the Prime Minister, recognise the problems facing agriculture. The Government are doing what they can within the rules on state aids.

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Special assistance has been given to Northern Ireland pig farmers to compensate them for the immediate effect of loss through fire of a major processing plant. A sum of £400,000 has been made available to promote pigmeat sales. In this, I concur with the recommendations of the noble Lord, Lord Patten. A cross-border study of the pig industry has been set up and will report before the summer. The Government will study that report extremely carefully.

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

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

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

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

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

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

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

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

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

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inward investment and economic redevelopment. Political success is vital, as my noble friend Lord Blease said.

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

On Question, Motion agreed to.

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