Northern Ireland Assembly
Monday 25 June 2001
Industrial Development Bill: First Stage
The Assembly met at noon (Mr Speaker in the Chair).
Members observed two minutes’ silence.
The Minister of Enterprise, Trade and Investment (Sir Reg Empey):
I beg leave to lay before the Assembly a Bill [NIA 18/00] to establish Invest Northern Ireland to exercise certain existing functions in relation to industrial development; to dissolve the Industrial Development Board for Northern Ireland, the Local Enterprise Development Unit and the Industrial Research and Technology Unit; to abolish certain functions of the Northern Ireland Tourist Board; to amend the Industrial Development (Northern Ireland) Order 1982; and for related purposes.
Bill passed First Stage and ordered to be printed.
The Bill will be put on the list of future pending business until a date for its Second Stage has been determined.
I confirm to the House that, in accordance with Standing Order 40(2), I have been notified by the Chairperson of the Committee for Finance and Personnel that the Committee is satisfied that there has been appropriate consultation with it on the public expenditure proposals contained in the Budget (No 2) Bill. The Bill may therefore proceed under the accelerated passage procedure without a vote.
I remind the House that the Second Stage of this Bill, as with that of any other Bill, is an opportunity to debate the broad principles of the Bill and not an occasion for detailed debate on other sundry matters.
The Minister of Finance and Personnel (Mr Durkan):
I beg to move
That the Second Stage of the Budget (No 2) Bill (NIA 17/00) be agreed.
The debate follows on from the Bill’s First Stage last Tuesday and the Supply resolution for the 2001-02 Main Estimates that was considered on Monday 18 June. The purpose of the Budget (No 2) Bill is to give legislative effect to the resource Estimates that were approved through the Supply resolution that was passed last Monday.
Given the wide-ranging and valuable debate then, I do not intend to detain the House with unnecessary repetition of the detail implicit in the spending authorisation contained in the Bill. I gave much of that detail last week. However, I will summarise the main features of the Bill in accordance with the nature of the Second Stage debate as envisaged under Standing Order 30.
(Mr Deputy Speaker [Mr McClelland] in the Chair)
The principle of the Bill is to authorise the use of resources totalling £5,021,262,000 by Departments and the issue of £4,679,167,000 from the Northern Ireland Consolidated Fund in respect of the Main Estimates for 2001-02. Members received copies of the detailed Main Estimates booklet on Monday 11 June.
I am grateful to the Committee for Finance and Personnel for the attention that it has given, and continues to give, to matters of public expenditure and related procedural issues. I am also grateful for the confirmation from Mr Molloy, Chairperson of the Committee, that there has been appropriate consultation on the public expenditure proposals contained in the Bill, as set out in his letter to the Speaker dated 18 June.
This is the first full year in which Budget allocations will be determined and managed on a resource basis. Aside from the technical dimension of that, the transition involves the introduction of several new terms. Most of those were covered in the Vote on Account process in the Budget Bill in February. However, the Budget (No 2) Bill introduces an additional new term — "accruing resources" — which represents the Departments’ receipts or income. It was known as "appropriations in aid" in the old cash regime. I hope that clarifies matters for Members.
As the Speaker has acknowledged, the Budget (No 2) Bill represents the endgame regarding the 2001-02 Budget — a process that started last year and ran from the Budget vote in December 2000 to the Supply resolution debate last Monday. The spending plans reflected in the Bill have been approved and endorsed by the Assembly, but I will be happy to deal with any points of principle that may arise.
The Chairperson of the Committee for Finance and Personnel (Mr Molloy):
Go raibh maith agat, a LeasCheann Comhairle. The Minister of Finance and Personnel presented the draft Budget for 2001-02 on 17 October 2000. That was followed by a substantive Budget debate on 14 November and by the final Budget debate on 18 December. A sequence of events was involved. It really comes down to the question of whether the Assembly was given sufficient opportunity to properly consider the Bill’s implications and, if not, whether there is sufficient justification for proceeding in the absence of such consideration.
The Committee for Finance and Personnel is concerned that, due to the Westminster and local government elections, there has been limited time for Assembly Committees to have had appropriate opportunity to analyse the Estimates and to discuss them with their respective Ministers. In more normal circumstances it is the duty of the Committee for Finance and Personnel to ensure that all the Committees’ views on the financial provision proposed for the various Departments are co-ordinated and brought before the Assembly.
Clearly it is not possible to have such a properly informed debate on the Estimates for the current year. However, the Minister of Finance and Personnel kept the Committee fully informed and the Assembly updated on a regular basis on the preparation of the final version of the Estimates for 2001-02. The Finance and Personnel Committee is content that the requirements of Standing Order 40 for appropriate consultation have been fully met and that it is in order for the Budget (No 2) Bill to proceed. Go raibh maith agat.
The Budget debate in any legislature is an important event. The Budget dictates how we will govern ourselves. It has a tremendous effect on the lives of our constituents, the economy and social well-being.
At this stage of the Bill it is possible to deal only with very general terms. Notwithstanding that, it is evident that the total amount of money we can spend is determined by our income and not by our expenditure. It is almost a self-evident truth that our income in this case is capped by the grant-in-aid received from the Exchequer.
We know from previous Assembly debates that we have cross-party agreement that the amount of grant-in-aid is inadequate. Its inadequacy has been exposed more and more in our experiences over the past two years. Each time we look at a departmental budget we see deficiencies, not in the work that is being carried out, but in the inability to have the money to do further things.
On previous occasions the Minister has indicated to the Assembly the urgent work he is doing with the other Ministers and with the First Minister and the Deputy First Minister regarding the famous — or now infamous — Barnett formula, which dictates in many ways how we govern in Northern Ireland.
I would like the Minister’s assurance that those negotiations, which we all hope will go to a higher level, are now well progressed. Perhaps he could give us some indication as to whether there is a willingness on the part of central Government to redress the inadequacies of the Barnett formula and also to take on board the problems we are having by the revelations that each Department makes to the Assembly.
We have only to look at the Department of the Environment and its Committee to see huge deficits in water and sewerage provision, roads provision, hospital provision and adequate medical and surgical training.
Those deficits have come about as a result of inadequate expenditure in previous years. It is estimated that there has been underspending on our infrastructure and on our primary resources of health and education for almost the entire period of direct rule. That being the case, it is surely a sound and valid argument that that deficit should be restored from a top-up; not from current restricted financing. A top-up would enable us to recover and address that inadequacy in these major issues.
Infrastructure is not a word that excites the ordinary man and woman in the street, but if you do not have infrastructure you cannot progress as a society, you cannot sustain industrial development, and you cannot attract inward investment. All those things impinge directly on the educational prospects — and the healthcare, moreover — of every man, woman, and child in our community.
We have had a series of almost catastrophic events that were never envisaged in the Barnett formula. Some of those were in agriculture — the BSE crisis, the foot-and-mouth disease outbreak and the threat of the run-down of our fishing industry. Those three major crisis areas in agriculture were not provided for by the formula used to give us our financing.
Looking at the other Departments, £60 million is required for sewerage and £100 million for infrastructure. Those are major issues that need consideration. I doubt that the current Budget can properly address our ongoing plans. However, those will have to be addressed now or in the immediate future. I am talking about matters such as the recent Hayes Report which, if it is accepted, predicates a huge investment in hospital infrastructure and medical services. We do not have adequate resources to meet that need.
The only alternative to the capped Barnett formula spending is to use direct taxation, which is a dirty word because it always means increasing taxes. The Scottish Parliament has a direct taxation revenue-raising power of up to three pence in the pound. We do not have that power, and I am not arguing that we should have that facility. However, because of the strictness of our current grant-in-aid controls we will have to review the existing arrangements or look at alternatives. There is a great reluctance — understandably and sometimes justifiably — among all Assembly parties to increase direct or indirect taxation, even in the form of licences. In the next two days that issue may crop up. All parties bitterly oppose minuscule increases in licensing fees, and that indicates that, even if we had direct taxation, we would not be able to use it. In the meantime, we must tailor our Budget and our commitment to economic and social development to the resources available.
Another huge area coming up is the recovery of the agriculture industry and its knock-on effect in tourism, which has faced horrendous problems in many areas of Northern Ireland. South Down has suffered a triple whammy as regards tourism, agriculture and fishing, with no apparent real moneys being directed to those problems. I hope that special extra funding will be directed from the Executive to address those issues.
In the area of fishing alone, the Irish Government have made an additional £20 million available for the improvement of their fishing fleet while we are decreasing the capacity of our fishing fleet. I do not want to labour that issue.
We have the question of building new maternity hospitals, which was debated on the radio this morning. Where is the money coming from for such projects? These are real issues that any debate needs to address, because unless we can make a change in our economic and social well-being — a change in the fabric of our society — then our efforts in relation to our devolved responsibilities are brought to nought by lack of finance.
The Minister, in his opening remarks, said that I would fully understand the meaning of the term "accruing resources", because it is a substitution for "appropriation in aid". I do not know what "appropriation in aid" is, so perhaps he would explain that phrase also.
We are very grateful for the opportunity to consult at this important stage of the Budget. As well as talking about the overall principles, I would like to look in some detail at certain areas we would like to see underlined in the Budget.
I begin with one of the Assembly’s most important considerations — the future of our children. We hope to see plans for a children’s commissioner coming on-stream in the next year. Can the Minister tell us what plans have been made for additional expenditure for that purpose? Which Department — or Departments, as we are talking about joined-up government — will have responsibility for the office, and how will that be reflected in future Budgets?
There is recognition of the importance of research and statistics as a firm foundation on which to base future policy analyses. Through the many parliamentary questions that we have asked this year, we have ascertained that there are no available statistics on some topics, such as, for example, the number of children living in poverty. It is unfortunate that such statistics do not exist. In order to fine-tune policies, as the Executive suggested in their position report to the Assembly for the Programme for Government, we need high-quality, relevant and accurate information.
We are disappointed that, apart from specific funding for the Northern Ireland Statistics and Research Agency, only the Department of Higher and Further Education, Training and Employment has allowed for departmental research and development. Although the Department of Enterprise, Trade and Investment has the Industrial Research and Technology Unit, other Departments, such as those responsible for the social development and health budgets, should be explicitly prioritising research moneys. Will the Minister look into the level of each Department’s research budget and tell us what the budget accommodation is?
The Bill does not show the amount of money to be spent on private finance initiatives (PFIs) and how they deliver public services. As we have asked before, does the Executive accept that if they continue to pursue expenditure by private means, they are mortgaging our children’s future? Spending money on private firms now means that we have to pay it back later and, it is accepted, with a great deal of interest. What percentage of money does the Bill allocate to private companies, and what will the repayment be? We would appreciate a response to these questions. We do not believe that private finance represents value for money for our people today or tomorrow.
I also want to talk about economic issues. What is the Minister doing to accommodate the recommendations made by the Committee for Enterprise, Trade and Investment on the ‘Strategy 2010’ report concerning tax? A number of our recommendations favour helping the economy to grow and become stronger through initiatives, tax breaks or other imaginative ways. Are those recommendations being accommodated? If so, what is being done through the Budget to implement proposals such as tax breaks for the creative industries, greater support for the social economy or the needs of small business?
The euro is one of my own areas of interest. As we all know, the euro will be in place and in the pockets of people south of the border. What moneys will be set aside to help Northern Ireland’s small businesses manage the position they will find themselves in? Will there be a proposal to help small businesses give their prices in euros as well as pounds? What initiatives are there?
I want to raise a point that was brought to me by trade unions about the minimum wage. The Assembly supported the £5 minimum wage, and it is hoped that legislation will be introduced in the near future to accommodate the pressure from the Assembly on that. What is the Minister doing in the Budget to prepare for that legislation?
Childcare is of great interest to the Women’s Coalition. What provision is in the Budget for subsidies for childcare places and for accommodating the parental leave measures that will come in through legislation in Brussels and London?
Mr Deputy Speaker:
This is the Second Stage of the debate on the Budget (No 2) Bill — it is not an opportunity to rerun the supply debate of last week. In a Second Stage debate we discuss the principles and philosophy of a Bill, not its specific terms. Members had the opportunity to raise such points in the supply debate. Please bear that in mind.
I take the point. I will conclude my remarks without going into too much detail, but I thought it important to raise those points for the Minister to consider.
My final point concerns peace building, which also concerns the future of our children. How can individual Departments, and the Executive as a whole, lead on issues such as challenging sectarianism? Although we are emerging from conflict, we still live in a deeply divided society. There should be an extensive programme to combat sectarianism in schools, community centres and at all levels of society.
Political leaders can lead from the front by example. However, those leaders should look to the examples of women’s groups and trade unions that have done so much work and have such expertise in that area. Will the Executive consider, and respond to, the money that has been set aside for developing a strategy on community relations, anti-sectarianism and questions that we have on race and ethnicity?
This is a Second Stage debate, and we on this side want to come back to some of the issues at Consideration Stage and perhaps thereafter.
The Budget (No 2) Bill carries on from the previous Budget Bill and earlier Supply resolutions. As this is the Second Stage, we do not intend to divide the House today. We will consider the detail of the various appropriations contained in the draft legislation. We have no difficulty whatsoever with many of them, many of which are, necessarily and rightly, in general form. However, there are issues that concern us and should concern us, especially Members on this side of the House.
For example, the Minister and other Members will not be surprised that we will not forget or run away from expenditure under the Department of Finance and Personnel on, for instance, the North/South Ministerial Council, the various all-Ireland bodies and other areas, such as the Civic Forum. Our party will return to those issues later.
I want to put on record that our position in the House today does not in any way diminish our opposition to those areas of expenditure where we believe that the allocation of money does not represent good value for the people of Northern Ireland. The allocated money is being spent on a political project and not on delivering real and substantive benefits to the people on the ground on both sides. For instance, after a considerable period, many people still wonder exactly what the Civic Forum is supposed to be doing for its money.
We will return to those issues later. It would not be appropriate to go into them in detail at this stage, especially in the light of your earlier ruling, Mr Deputy Speaker, but I want to put the Minister on notice about them.
My contribution concerns a fairly small but important element of the Budget. I pay tribute to the Minister for his co-operation in ensuring that the requirements of the Government Resources and Accounts Act (Northern Ireland) 2001 have been taken fully into account. Resource accounting is a new concept that takes the presentation of accounts away from simple receipts and payments. It enables Members to have a much more comprehensive picture of the state of the various Departments, and it is to be hoped that it will allow Members to identify areas where better use of public money can be made, where savings are possible and where additional services are feasible.
I speak now as an individual — lest I get into trouble — but as Chairperson of the Audit Committee, I realise that for Departments to comply with the Act will involve additional work and additional pressure. Nevertheless, it is well worthwhile. The benefits are enormous, and they will further advance the Assembly’s impact on how public money is spent.
I take this opportunity to pay tribute to the Public Accounts Committee and, in particular, to Mr Billy Bell, although he belongs to another party. That Committee has established itself as a very reliable watchdog to ensure that the bad practices of the past are eliminated. In the proposed Bill every penny spent must be accounted for, and civil servants at all levels now realise that.
We hope that the dark days of direct rule are behind us. Let us hope that we never return to a situation where elected representatives are not in place to ensure that Government services are provided on a basis of best value, keeping in mind the need to target social need and test for equality.
In the years ahead, the services for which we are responsible can be transformed, provided that there is proper public scrutiny. It would be remiss of me not to pay tribute to the Comptroller and Auditor General, who no longer works in isolation but, for the first time, reports to elected representatives. That exercise is working extremely well, and the public at large realise that.
In conclusion, all of this would not be possible if everyone were not pulling in the same direction. The Audit Committee, the Public Accounts Committee and the Finance and Personnel Committee are all co-operating in the common interests of everyone. At times that may seem strange, but it is a reality. The Minister of Finance willingly participates in a spirit of co-operation, and that is a good omen for the future. The Assembly needs to blow its own trumpet at times. It has every reason to be proud of the fundamental changes that have taken place and that will continue, provided that common sense prevails and the wreckers do not have their way.
Mr Deputy Speaker:
Minister, you will have heard my earlier remarks that this is the Second Stage of the Budget (No 2) Bill and not an attempt to rerun previous debates. I know that you will be judicious in your response.
I noted your earlier remarks, Mr Deputy Speaker, with some appreciation. Members need to appreciate the nature of the Budget exercise. This is obviously not an occasion when the Assembly can range freely over all the expenditure items in the budgets of the various Departments. We are trying to complete, in a competent and proper manner, the necessary procedures following the budgetary decisions made last year and approved by the Assembly.
On the basis of those budgetary decisions we were able to authorise expenditure in the first period of this financial year through the Vote on Account and the Budget Act (Northern Ireland) 2001. In this Bill we are authorising the rest of the expenditure for this financial year. Members want to have regard to, and Committees should ask, whether the Estimates and the Bill properly reflect those previous decisions. The fact is that they do. I know that some Members have opposed some of the provisions, but in the Budget (No 2) Bill we are doing what we are required to do, which is to provide for the competent authorisation and allocation of expenditure as already approved.
Some points dealt with particular areas of expenditure. I will not go into those, because those areas are not germane to today’s exercise. On the other hand, I do not want to sidestep everything, because many Members did not address the particulars of the Bill as such, but raised wider budgetary issues.
As Chairperson of the Committee for Finance and Personnel, Mr Molloy registered the Committee’s concern about procedures — particularly in the longer term — and also recorded its satisfaction that there had been sufficient consultation with it to allow accelerated passage given the time constraints. I appreciate the constructive role that the Committee for Finance and Personnel has played and continues to play. On behalf of my Executive Colleagues, I want to ensure that it can continue to play and develop that constructive role, not just in its own interest but as an aid to the good work of other Committees. The Committee for Finance and Personnel has a pivotal role in ensuring that the Assembly gets proper consideration in regard to budget planning and implementation.
The Barnett formula falls outside the remit of the Bill per se. However, I assure the House that the Executive are well seized on that issue. Next year, in the context of the 2002 spending review, we will need to refine and articulate a strong case for revisions of the Barnett formula. It will not be a case of just asking the Treasury if it knows who is asking. There will be difficult issues, and the Executive are prepared to address them. The Executive hope that Members and Committees will be realistic about the difficulties and challenges that they face. Just as there are strong points to make, there are also strong points and questions that must be answered.
The point about the Barnett formula raises the issue of the adequacy of our budget, and many Members have touched on this, both today and on other occasions. As an Assembly we have already registered those questions. The Assembly needs to look not only at the question of whether it needs more money, but at the question of whether it needs to plan more wisely for the money that it has. Do we need more targeting for that money?
Do we need more definitive strategies to underpin our spending plans? Do we need those strategies for the discrete spending decisions at departmental and ministerial level as well as for the Executive’s Determinations? I am concerned when there are many calls in the Assembly for more money rather than attempts being made to ensure that better use is made of the budget. We must remember that the information in the Budget (No 2) Bill and in the Estimates should not be referred to only as we go through the process of passing the Bill. Departmental Committees should use the information, together with the details in the public service agreements and the commitments in the Programme for Government, as they scrutinise the work of Departments during the year.
Committees can scrutinise the work of Departments in many ways. There can be more monitoring of a Department’s performance. If there are questions about the quality of Estimates the most telling way to pursue the answers is not by considering the Budget or Budget (No 2) Bill; it is by looking at the scrutiny work that departmental Committees can undertake during the year. Committees can interest themselves in certain programmes and look at the related management, administrative and policy issues. In doing so, they can also examine the adequacy or accuracy of Estimates. The Executive have no problem with Committees taking such an interest. Committees should rightly interrogate spending plans at a departmental level, as well as in the wholesale context of Budget consideration at such times.
Ms Morrice raised many points that are well beyond the ambit of the Budget (No 2) Bill by nature of their detail. A Bill is coming forward concerning the children’s commissioner, and it is not my place to imply or suggest that anything that the Assembly might legislate for is pre-empted or predetermined by the Budget (No 2) Bill — it is not.
Issues have been raised concerning the importance of statistics. I refer people with those concerns to my point that Committees should make sure that they impress their considerations on Departments to ensure better planning and targeting, which are necessary, because we need more robust statistics. The Northern Ireland Statistics and Research Agency is trying to do that on several levels, and it responds to and takes on board the working requests of other Departments. We are trying to improve that situation, and if Committees can offer any insight into statistical gaps we will try to make good those gaps. We identified that problem in relation to the North/South statistical profile, which we published earlier this year.
Ms Morrice asked what is being done to accommodate the Enterprise, Trade and Investment Committee’s views on ‘Strategy 2010’ and certain tax considerations. Mr McGrady asked about tax-raising powers and the sensitive issues involved in such considerations. The points made by Ms Morrice gave rise to questions about the fact that some people are seeking tax-raising and tax-reducing powers.
If we are to consider more fiscal discretion or leverage for the Assembly, we must make sure that we join up our thinking on that. It will be very difficult for us to make a coherent case for any improvement in such capacity if we are saying continually that we will not levy any increases and that what we want, by way of intervening powers for ourselves in the fiscal regime, is simply the ability to offset or duck certain taxes. We must make sure that we not only do more as a joined-up Government but that we are ready to show that we are a grown-up Government.
The points about following through on ‘Strategy 2010’, which raise questions about the impact of aspects of the fiscal regime, will be reflected by the Executive in their consideration with the Treasury and other devolved institutions of several matters in the fiscal regime — consideration that takes place at the Treasury’s request.
In the past we have reflected on fuel duties, aggregates tax and so on, and we will do so again — that will include tax breaks for creative industries. Those points will be made on behalf of the Executive, not just by me as Minister of Finance and Personnel, but by the Ministers with relevant sectoral interests, such as the Minister of Enterprise, Trade and Investment, Sir Reg Empey, or, in the case of creative industries, the Minister of Culture, Arts and Leisure, Mr Michael McGimpsey. Those points will be pursued with the Treasury, not least by the First Minister and the Deputy First Minister, because it falls to them to represent and prosecute certain cases.
Mr Dallat made useful points about the implications of resource accounting and budgeting. We must understand that we are dealing with a different system. We do not fully realise the implications of that. It will create some difficulties, but I am impressed by the way in which Departments, including my own, have managed the challenge of change to date.
We must recognise that this will change the nature of the control that the Assembly will have. It gives us greater planning opportunities and greater planning challenges, because the Assembly will have more of the picture than it had before, as Mr Dallat said. Not only will the Assembly control spending, it will control the stock of assets. People have not fully realised the implications of that.
Mr Dallat’s remarks on the contribution of the Public Accounts Committee are well made, but it should not just be up to the Public Accounts Committee to examine post hoc whether expenditure was undertaken in the most proper, beneficial and effective manner. There is a considerable gap of activity, and that will enable departmental Committees to become involved. They will be able usefully to interrogate more of the operative spending practices of Departments than previously. That will not in any way detract from the work of the Public Accounts Committee. In many ways it will build upon much of the work and consolidate many of the pointers and useful principles that have been established by the Public Accounts Committee in relation to some programmes. However, we cannot cover them all, and I would like to see the various Committees taking up and amplifying some of the concerns that have been registered.
There was one question on accruing resources. It is difficult to understand what appropriations in aid are. Cash received by Departments, with the approval of the Assembly, is appropriated towards their gross expenditure plans. Appropriations in aid are receipts and income that come to Departments and are used in support of our wider Budget, and that is what we mean by accruing resources.
I will refer points on individual spending programmes to the relevant Minister or write directly to Members on them. It would not be appropriate to go through all those points exhaustively because they are not necessarily appropriate to the Budget (No 2) Bill. I appreciate that some people missed the Supply motion last week because they had expected it to run into Tuesday, and I accept that some points have been saved from then and are being carried over now.
Question put and agreed to.
Resolved (with cross-community support):
That the Second Stage of the Budget (No. 2) Bill (NIA Bill 17/00) be agreed.
The Minister of Finance and Personnel (Mr Durkan):
I beg to move
That the Lands Tribunal (Salaries) Order (Northern Ireland) 2001 be approved.
Article 3 of the Order provides for increases in the annual salaries payable to the president and members of the Lands Tribunal for Northern Ireland, with retrospective effect from 1 April 2000 and 1 April 2001, following recommendations made in the reports of the Senior Salaries Review Body.
While the provisions are straightforward, the procedures involved in their making have been anomalous. Before devolution such an Order was subject to negative resolution at Westminster and laid before Parliament under paragraph 3(3) of schedule 1 to the Northern Ireland Act 1974. Following devolution that Act was repealed, and such Orders became subject to affirmative resolution in the Assembly. Therefore the Department of Finance and Personnel has been required to draft the Order for the Secretary of State’s signature. The draft Order does not include a commencement date, but that should be taken as the day after signature by the Secretary of State. The Secretary of State has agreed that I should take the Order forward on his behalf.
I commend the Order to the Assembly.
Question put and agreed to.
That the Lands Tribunal (Salaries) Order (Northern Ireland) 2001 be approved.