Northern Ireland Assembly
Monday 19 June 2000
The Assembly met at 10.30 am (Mr Speaker in the Chair).
Members observed two minutes' silence.
Mr P Robinson:
On a point of order, Mr Speaker. A motion was submitted to the Business Office to be considered by the Business Committee at its last meeting for inclusion on the Order Paper for today or tomorrow. It was in the form of an exclusion motion. I understand that the Business Committee dealt with this matter in a peculiar manner - it chose to make up a new rule. That rule is not supported by the Standing Orders and it goes beyond the scope of the legislation. It sets more rigorous conditions on a motion being brought to the House than was envisaged by either the legislation or the Standing Orders. The Northern Ireland Act 1998 indicates that
"A motion for a resolution under this section shall not be moved unless . it is supported by at least 30 members of the Assembly."
The fact that it says that it "shall not be moved" indicates a process after it has been included on an Order Paper - not before.
It is fairly clear that a precedent was set on two previous occasions when a motion was put down on the Order Paper without the 30 signatures and that you, Mr Speaker, allowed it to be tested. That seems to be the appropriate way for it to be dealt with. There are serious legal issues involved, and precedents could be set by this "off the hip" decision by the Business Committee, which seems to have been taken for political purposes.
I have to say on political grounds that it seems rather peculiar that on the day that the Chief Constable announced that the IRA was involved in a killing -
Order. The point of order has been well expressed and to go further would be to engage in a speech on the matter.
The Business Committee has received a significant number of motions which are on the no-day-named list, two of which are, to my knowledge, on exclusion. The decision that neither of them had achieved a sufficient level of support to enable them to be brought forward by the Business Committee then was perfectly valid given our Standing Orders. It was not a question of whether a motion on exclusion would be on the Order Paper; it was a matter of when and if there was support.
The reference that the Member made to how things were done previously was, of course, to a time when it was not the democratic decision of the Business Committee that counted, but the benign dictatorship of the Speaker. That he speaks of that time in positive, nostalgic terms I take as a compliment, even though it is not justified as such. What has happened is entirely in order and legal. The motion is on the no-day-named list, along with others for consideration. It would be wrong for me to comment on any decision of the Business Committee, save to say that the minutes of the Committee's meeting become available publicly once they have been approved by the Committee.
Mr P Robinson:
I would be happy for my party to meet you to take this matter further because you have missed several important points. During the period between the initial Standings Orders and our present ones no change was made which would allow this decision by the Business Committee. Furthermore, there is nothing in the legislation that requires the Business Committee to set this criterion down.
I have made my ruling. I do not consider what you have said as a challenge but as a request that we meet to discuss this outside the confines of the Chamber. I am happy to do that as we have done so on previous occasions. The ruling nevertheless stands: the decision was in order.
Mr Paisley Jnr:
Further to my Colleague's point of order, Mr Speaker. Would it be in order for you to confirm that this action by the Business Committee was taken at the behest of the Ulster Unionist Party to protect Sinn Féin?
Order. The Member is entirely aware that that was not a point of order. Indeed, the point was a quite improper one.
I have received only one indication that a Minister wants to make a statement at this sitting. The Minister of Higher and Further Education, Training and Employment will make a statement on the support programme for university research, after which we will have up to 45 minutes for questions on it.
The Minister of Higher and Further Education, Training and Employment (Dr Farren):
I should like to make a statement on the funding of research at Queen's University and the University of Ulster.
I am delighted to come before the Assembly today to announce the support programme for university research - a public-private partnership designed to enhance the strategic approach of the universities to the development of their research capacity, to strengthen the research base in both main universities and, in particular, to increase the amount of research that is of the highest international standard.
I am convinced of the importance of the university research base to the regional economy and to our economic prospects. This was made very clear in the recently published Northern Ireland Economic Council's report, and it is a central theme of 'Strategy 2010'.
That report recognises that university research and development is essential for the future economic well-being of Northern Ireland. Indeed, successful regional economies elsewhere all bear testimony to the importance of a strong research base.
A strengthened research base in Northern Ireland will result in significant contributions to our social, cultural and economic life and will add to our universities' international reputations.
I have listened to the comments of the vice-chancellors of Queen's University and the University of Ulster about the reduction in their research infrastructure funding over recent years, which has contrasted with what has been happening to peer institutions in Britain and the rest of Ireland. I am aware of the implications for the universities in terms of attracting and retaining staff and sustaining and developing research work of high quality. I am also aware that the universities have been working extremely hard to improve their performances in research as evidenced by the research assessment exercise. The significant research achievements of both universities were recognised in the last research assessment exercise. We now wish to give both universities every support in building on and adding to these achievements.
With all this in mind, I announce the support programme for university research (SPUR). The programme will run from 2000-04 and will lead to the investment of up to an additional £40 million in the research infrastructure of Queen's University and the University of Ulster. The Government are willing to invest up to £20 million of this funding over the four-year period and invite the universities to raise matching funding from private sources pound for pound.
This investment will be made on a competitive basis. I have asked the Northern Ireland Higher Education Council to administer the programme and competition, assisted by an international panel of experts, which is currently being drawn together. The universities will be asked to submit their institutional strategic plans and proposals for research by the autumn of this year, and decisions will be made on funding by November. The vice-chancellors will be asked to confirm that they have raised privately the matching funding for their successful proposals before the public funding is released.
The intention is that the additional investment will enable the universities to fund the highest priorities within their strategic plans which are judged by the panel to be of or to be capable of attaining an international level of quality. This may include expenditure on appropriate buildings and equipment or on research teams or other facilities.
This is a prime example of my desire to proceed in partnership with the universities, and I have every confidence that they will come forward with projects which are of the highest quality and will benefit our whole society. This provides both institutions with the opportunity to invest in their highest priority areas and to broaden the base of their international-level research.
I am delighted to announce this programme. It confirms my, and the Executive Committee's, faith in the universities and in the contribution they make to regional life. It is also clear evidence of the Executive's determination to secure viable forward-looking and sustainable economic development. The Executive will shortly announce a package of measures which it hopes to achieve over the next 12 months. I am glad to announce that this programme will be part of that package.
The Chairman of the Higher and Further Education, Training and Employment Committee (Dr Birnie):
I am sure that I speak on behalf of my Committee's members when I welcome this announcement. There are, however, three points that need clarification.
First, is the Minister aware that, even if the full £40 million, half of which depends on the private sector, is realised, there will still be a considerable shortfall in Northern Ireland university-based research and development given what is happening in universities in other regions, its competitors?
I base that argument on the fact that according to the Northern Ireland Economic Council's report of late last year total research and development spending in Northern Ireland - and I am looking at its estimates - represented 1·1% of GDP, compared to 1·4% in the Republic of Ireland. And it was by no means a high performer in European terms. Furthermore, that report indicated that we have the lowest amount per capita of university-based research and development of any region in the United Kingdom, and it estimated that there was an annual shortfall, given the trends in the 1990s in university-based core research and development, of roughly £8·5 million.
That is the first point on which I require clarification. Does the Minister recognise that this is a welcome first step but only a first step?
Secondly, the Minister referred to the mechanism whereby money will be -
Members are meant to put individual and concise questions. I appeal to the Member and those who follow him to be concise.
Will the Minister confirm that the mechanism for the delivery of money represents the right balance between achievement of international excellence and meeting locally identified research needs?
Thirdly, will the Minister confirm that there needs to be co-ordination on the research and development effort his Department has some responsibility and the Department of Enterprise, Trade and Investment has some? Indeed all Departments have some responsibility for this. It is par excellence a cross-cutting issue requiring further co-ordination from the Centre.
I thank the Member for the questions and for his words of welcome for my announcement.
I realise that we have a lot of leeway to make up and, in his words, he is accepting that this is a first step towards that. I hope that it is the first of many. I do accept comparisons with other regions. Comparisons with the Republic of Ireland are fairly pertinent, but we have to bear in mind that while significant increases have been recorded there in investment in research and development, they are coming from a lower base. The degree of affluence which is now available to the Government there for research and development is something which is quite novel and quite recent. However, we have to continue to seek additional funding. The universities themselves accept their responsibility, and in becoming involved with us in this particular programme they are clearly recognising that responsibility, especially given that this is a matching funding programme.
With respect to the mechanism that is to be employed in deciding on the projects and proposals that will come forward, I am satisfied that it will achieve the right balance. Research projects which are directed at the local situation should meet, and I have every confidence that they will meet, the highest international standards. There should be no reason for the projects put forward and funded under this programme not being ones that will enhance, as I said in my statement, the international reputations of both universities while the projects themselves may be directed at local needs. I trust that there will be lessons from the outcome of the research supported in other parts of the world as well.
With respect to the need for co-ordination, I should point out that when the Northern Ireland Economic Council's report was published, the Department of Enterprise, Trade and Investment, under Sir Reg Empey, and my Department met and decided to examine its implications of that report for improvements in the research and development structure, and a report is imminent from the two Departments - a joint report. When that is available I will put it before the Committee for wider discussion.
The co-ordination which that report called for is something we have in mind, and we will be acting on that as soon as possible.
The Deputy Chairman of the Higher and Further Education, Training and Employment Committee (Mr Carrick):
I welcome the Minister's statement. The sum of £5 million per year, £2·5 million of which will come from the public purse, is modest, but very welcome. I trust that the expenditure will be very clearly and properly focused on those areas of need within the university research and development programme. As our Chairman indicated, the research and development sector is vital in promoting the Northern Ireland economy. However, can the Minister assure me that his announcement will have no adverse impact on funding for general research and development in universities? Can he assure me that there will be no let up, and no taking the foot off the pedal, in relation to funding for basic, but very important, research and development? Research and development needs substantial investment, and the announcement does not close the funding gap.
How does the Minister intend to sustain this type of investment, particularly when we find ourselves operating in a very competitive global economy? It is vital that we have some indication of what further funding will be made available as a follow on to this announcement.
I can reassure the Member that this is additional funding which will not impact negatively, as his question might suggest it will, on the regular funding from my Department to the universities. Obviously, with a programme such as this, which will provide additional funding for four years, we would expect, with the universities, to find the means of extending the period beyond that. At the moment, we can give no commitment about any such extension, but the matter will be kept under review.
Members need to bear in mind that there is a significant annual provision for research and development in the universities, and they have been very successful in attracting funding from many sources apart from the public purse. We encourage them to continue with their endeavours in that regard. We will keep the matter under review, but the specific announcement today will provide a significant contribution over four years.
This announcement could not come at a better time for Northern Ireland, and it may well be the key to unlocking the future inward investment which is so necessary to illustrate that this Assembly works. Is it recognition of an underfunding of research in our universities?
Universities, and indeed the Department itself, have recognised the need for additional funding. I acknowledged what the vice-chancellors of both universities have said about the funding for research in their respective institutions in the past decade, and our proposal is a significant additional contribution. I trust that it will enhance the reputation of Northern Ireland in the eyes of those who are thinking of investing in this part of the world.
We already know that Northern Ireland has attracted much recent investment because of the reputation of our educational institutions, not least their reputation in research and development. It is recognised that other successful regional economies reflect the significance of a strong research base. The enhancement of that would undoubtedly add to our appeal for inward investment, particularly in high-tech industries which need the support of research and development in universities and other institutions.
Go raibh maith agat, a Chathaoirligh. I welcome the Minister's statement in addressing the serious matter of research and development.
How will the Minister's initiative impact on or assist small and medium-sized enterprises? How will it fit in with the universities' assessment of the matching funds? For a small, struggling firm to put its own money into research and development must be a very low priority. Does the Minister believe that this mechanism will facilitate small-and medium-sized enterprises to tap into as well as contribute to it?
In view of press statements yesterday about Walsh visas and the concerns expressed about the quality and conditions of the training programme for young people in the United States, will the Minister make a statement?
The second part of that question is not germane to the statement that I made this morning. I am aware of the issues regarding the Walsh visas and I shall consider making a statement, as I am concerned by what I have read in the press.
In answer to the first part of the Member's question, in devising proposals to be submitted under this programme, the universities will be encouraged to take account of the needs of small-and medium-sized businesses, and I look forward to their doing that. They are already engaged in helping to develop many small-and medium-sized enterprises. However, it is not for the Department, or for me as a Minister, to determine how the money should be allocated. An international panel will be established, which will adjudicate on the proposals from the universities. Given all that has been said, and particularly the Northern Ireland Economic Council's report on the importance of research and development for our economy, we can take it that those needs will be borne in mind. As the proposals develop and are submitted, that need will be reflected.
Mrs E Bell:
New money for any sector of education is always welcome. My question is similar to those of others about the sustainability of this programme. Can the Minister assure the House that there will be value for money in the job-creation potential for young people? Will it, as one hopes, enhance the long-term development of new industries like the high-tech ones he mentioned? Has there been any discussion about co-operation on the sources of the matching funding?
I should like to start with the second part of the question. First, Members can take it that the programme has been developed through discussions with the universities, and while it is obviously their responsibility to ensure that matching funding is provided, we can at this point be confident that this will be the case. The universities will discharge their responsibility and ensure that matching funding is secured. However, the details of that are essentially a matter for the universities themselves to address. My Department is playing its part by declaring what we can make available, as is evident from my statement.
Regarding the first part of the question, while it is not possible to say with certainty at this point what the precise benefit of research will be to the economy, it is the understanding of the Department and myself that the universities intend to submit proposals which will make a beneficial contribution. However, I should like to stress in answering this question that the fund is not purely for economic development. It will also be available for projects in social sciences, humanities and the arts. As well as making significant contributions to our economic development, it is also appropriate that contributions be made across all aspects of our social and cultural life.
The Minister is to be congratulated from all sides of the House on his statement on research in our universities. I hope that it will go some small way towards closing the gap between the funding for research granted to universities here and that granted to those elsewhere in the Kingdom.
Does the Minister agree that investment in research is important when promoting universities internationally? I recently discovered in south-east Asia that both Queen's University and the University of Ulster are very highly regarded. Regrettably, Queen's was not complimented for following up its presentations in the same way that the University of Ulster does. Does the Minister agree that there should be investment abroad to attract more international students to our universities in Northern Ireland?
Secondly, can the Minister say whether the independent panel of experts has already been appointed? Thirdly, can he say if he expects any of this funding to be allocated before the end of the calendar year? Finally, can he assure us that, although it will be awarded on a competitive basis, not all of the £20 million will go to one university?
Which university does the Member have in mind? I should like to reassure him on the question of which university will receive money. I trust that both universities will be in receipt of substantial funding under this programme. Theoretically, it is possible that all of it might go to one, but it is highly unlikely, and both universities, as Members may be aware, have significantly improved their contributions to research of an international standard.
The Member is quite right to relay the impression that he has brought back from south-east Asia to us of the reputation of both institutions. I am very aware that they have worked very hard to attract students both at undergraduate level and at postgraduate level, where, of course, our researchers will be found. For a long time many students have come to both universities from south-east Asia, and I have every confidence that the universities will continue to enhance their reputations there and across the world. Both universities now have links which stretch east, west, north and south in their research enterprises.
I have addressed the first part of the question, that mentioned the significance of research and the panel in several of my previous answers. A strong research and development base is extremely important for our future economic well-being. My statement said that the international panel is in the course of being put together. Its membership has not yet been finalised, but it will be a small panel consisting of members with international reputations who are well capable of adjudicating on the proposals from the universities. With respect to the point about expenditure this calendar year, my statement did indicate that the allocations will be made in November, and we hope to meet that target.
I congratulate the Minister on this very appropriate and timely announcement. Does he agree that there is a great need for more collaboration between our two universities and those companies in Northern Ireland who want to be at the forefront of research and development locally and who want to be economically successful in the future?
Yes. If Members examine the annual reports of both universities they will find several examples, across the disciplines, of university researchers working with local enterprises in supportive and developmental ways. Today's announcement can only enhance that. The universities are taking tremendous strides towards ensuring that they have a research base of the highest standard, which is recognised not only throughout these islands but internationally as well. Both institutions have also demonstrated that they are entering into co-operative endeavours.
Rev Dr Ian Paisley:
Everyone will welcome the funds available for university research. However, I would like to press the Minister a little more about this international panel. He says that it will be a small panel. How many members does he envisage? What does he mean by "small"? Which countries will these international panellists come from? How much money will be spent on the panel? Ordinary men and women have a suspicion that far too much is spent on administration and not enough on the actual research. He should keep this in mind, so that people will know that most of the money available is spent on doing the actual job.
I thank the Member for his questions. I can assure him that expenditure on administration will be kept strictly to the minimum required for responsibilities to be discharged. The panel is likely to consist of five members with two local non-voting members and the Chairman of the Northern Ireland Higher Education Council, currently Sir Kenneth Bloomfield. The panel will be international because we want to satisfy ourselves that the funded projects will be ones that stand the test of peer review across the university field and that they will thereby be regarded as being of considerable significance. The individuals who will be part of that panel have not yet been finally determined. Rest assured that they will be people of repute. Expenditure will be the minimum necessary to ensure that the job is effectively done, and I look forward to the panel's being established. With local involvement and the chairing of the panel by Sir Kenneth Bloomfield, we can be assured that its responsibilities will be discharged effectively and efficiently.
Mr J Kelly:
I welcome the Minister's statement. It is unfortunate that we had only minutes to look at it this morning. We should have had more time to get details on it. Since we had the Minister's senior civil servants with us last Thursday, we could have had sight of the statement or been told of his intention to make it. That being said, A Chathaoirligh - [Interruption]
Order. A number of Members are having difficulty hearing your question, including the Minister. You may put your question.
Mr J Kelly:
I was saying that I welcomed the statement but that it was unfortunate that we did not have more time to pay attention to the details in it. I also said that it was unfortunate, given that the Minister's senior civil servants were with us last Thursday, that they did not indicate then his intention of making this statement this morning. However, I do welcome it.
I welcome the fact that, apart from the £20 million, there is to be an input from industry to the tune of £20 million. I refer to the student finance situation and to the £15·3 million net that is coming from student tuition fees for this year. Will the Minister pay as much attention to the question of student finance as he has paid to what is contained in this statement?
I thank the Member for his questions. On letting Members of the House have sight of a statement, I have complied with all requirements. The statement itself and the issues involved had to receive Executive clearance, and that was only possible at the Executive meeting last Thursday. Since then I have been in touch with the Chairman of the Committee to brief him, and all Members received a copy at the appropriate time for today's meeting. The requirements have all been met with respect to the circulation of the statement.
I trust that the Member, being a member of the Statutory Committee on Higher and Further Education, Training and Employment, will take the opportunity to discuss this matter in greater detail at the Committee's meetings.
With respect to the attention that I am giving to financial support for students, the Member will be very aware that during the first phase of the Executive, I lost no time in addressing this matter. We initiated a review of student financial support which is now drawing to a close - the Committee on Higher and Further Education, Training and Employment is engaged with it at the moment - so I do not think that either the Department or I can be accused of neglecting it in spite of the attention that we have been giving to finding additional funding for university-based research.
Rev Robert Coulter:
I too welcome today's announcement and congratulate the Minister on his statement. Following on from his last point, I have been reliably informed by the members of the review Committee that no consideration or provision has yet been given to or made for post-graduate students in research and development. Does the Minister agree that there is little point in funding research and development if there is no money available for those who will be doing the work in the research teams that have been mentioned?
I thank the Member for that very important question. The Department is keeping this matter under review. I imagine, however, that any research projects submitted by the universities will take account of the need for research students to be involved. It would be unlikely that research projects would go ahead unless provision had been made for research students. After all, it is within the context of research projects that researchers gain their expertise. The involvement of a new generation of researchers is a responsibility of the universities. They have to train them and provide opportunities to enable them to develop their expertise and skills in research. I would like to think that such provision will have been made for the projects that go ahead. Obviously, it is a matter for the universities to decide how their projects are staffed, but I would like to think that research students will be among the staff of the various projects and that we will not neglect the need to develop the next generation of researchers.
I also welcome the statement made by the Minister this morning. To follow on from the last question asked, does this increase in research funding mean that student numbers will not be increased?
No, I do not think there is any hint or suggestion that other aspects that relate to the development of our universities will be neglected. The issue raised by the Member is currently under review. Between 1999-2002 an additional 2,000 places in higher education will be made available to our universities and university colleges. This issue is constantly under review, and I do not think that it is prejudiced in any way by today's announcement on enhanced funding for research.
Mr Paisley Jnr:
I too welcome the commitment of £20 million of departmental resources to research. However, as the Minister knows, this is not a windfall payment. There is no such thing as a free lunch. Perhaps he could tell the House from which parts of his departmental budget he has had to redistribute resources in order to make this commitment for the next four years. Further, can he explain to the House whether or not colleges of further education will be able to buy into this research and benefit from it also?
I too welcome the Department's commitment of £20 million to this area. However, this is not a windfall payment, and there is no such thing as a free lunch. Will the Minister explain to the House which parts of his departmental budget he has had to redistribute resources from in order to achieve this commitment? Furthermore, will he tell the House whether colleges in further education will be able to buy into, and derive benefit from, this research?
The additional funding has been created by making savings on a number of services within the Department. This money is being made available over four years, not all at the same time, and is aimed primarily at the two universities. It is a matter for them, in devising their programmes, to determine whether the further education colleges should be involved. The Member will be aware that further education colleges do not currently have a major research role. This research programme is for the universities, but they may involve others, such as business people, in particular projects. That is a matter for their discretion, and I cannot determine it.
I too welcome the Minister's announcement. Does he agree that, as well as public/private partnership funding, increasingly close co-operation between the universities and the private sector is essential for final year projects, work placements and the tailoring of courses to the needs of industry? Does he also agree that this additional research funding will increase linkages between the education sector and industry and so may bring many additional benefits to the Northern Ireland economy and improve the job prospects of local students?
I thank the Member for that. If, after four years, his questions were to be answered in the negative, there would be considerable disappointment, not just on the parts of the Department and of the Minister of the time, whoever that may be, but throughout the House. Obviously we want to see the benefits to the economy that many people anticipate will follow from this announcement.
As I have said in response to several questions already, there will be many opportunities to enhance co-operation with various sectors of our economy and, indeed, more widely than that. It will be for the panel to decide which projects go ahead, and therefore which sectors of public life will benefit, but I like to think that it will be across the board. Through these projects, the universities will enhance their co-operation with all sections of society: the business world, culture and the arts, the social sciences, and so on. We will have to wait until individual projects are put forward to see where the investment is most likely to be made, but I expect that this investment will indeed be beneficial.
I welcome this statement. I am delighted that the Executive is putting in place essential pump-priming money at the cutting edge of new technology. This is evidence that devolution not only can and does work but will continue to work.
I ask the Minister to ensure that biotechnology and life and health sciences get adequate slices. How will the Executive ensure that it will get value for money for the additional investment?
I cannot be prescriptive about the areas of research that will be supported. The areas highlighted by the Member are ones in which our universities have been very active in terms of research, and I would be surprised if there were not to be some projects associated with them. We have to await the publication of the panel's determinations when it meets to consider what the universities have put forward. Both universities have been working very hard to develop strategic plans covering the courses that they provide across the board, with particular emphasis on research.
I understand that the universities are ready to respond to the challenge contained in today's announcement to ensure that the matching funding will be provided. I can assure the Member - indeed, all Members - that there will be value for money. The expenditure of this significant amount of public funding will be closely monitored, and we will obtain value for the money that we are contributing.
Does the Minister agree that research work carried out by universities is essential to the successful investigation and treatment of disease, especially in fields where the pharmaceutical industry is unwilling to invest? Does he also agree that the research by both the local universities has been to the forefront of their respective fields of study? Can the Minister give the Assembly a guarantee that the necessary funding will remain available for the completion of all such work currently taking place, and that such important work will not be restricted by lack of finance in the future? Can he also comment on whether private finance has yet been committed, and, if it has not been committed, what would happen to the programme announced today?
I will start with the last part of the Member's set of questions. If matching funding were not made available, then, quite obviously, the terms under which the programme has been announced would not be met. If it were a case of only partially meeting the announced public investment, which is on a pound-for-pound basis, then the programme would only go ahead on a pound-for-pound basis. I am reasonably confident at this stage that the universities will be able to ensure that the full amount of the matching funding will be provided. However, that is their responsibility. As I said in response to an earlier question, the universities have been in discussion with my Department for some time now on this, and we would not be coming to the House to make the announcement if there was not a reasonable expectation that the matching funding will be provided. At this point, it has to remain an expectation, but quite a confident expectation.
I join the Member in paying tribute to the universities' contributions to research in those areas that he mentioned, and I assure him that my Department will try to provide the necessary support. Obviously all programmes are - to use the Member's own word - restricted by the amount of finance available from time to time. But perhaps "restricted" is not the most appropriate word.
Funding allows things to happen, and I hope that we are allowing new things to happen with the programme announced today. I trust that together with the universities we will take further steps down the road to enable more new things to happen. It is up to the universities - and I stress this point again in response to several questions - themselves to determine, through the projects that they advance, where their emphases for research will lie. It is not the Department's responsibility to be prescriptive, and it would be inappropriate if we were to be so. That is not to say that we do not have our views. In discussion with the universities we can certainly point to what we believe might be valuable. However, the responsibility in these matters is ultimately with the universities themselves.
The time for questions is up.
(Mr Deputy Speaker [Mr McClelland] in the Chair)
The Minister of Finance and Personnel (Mr Durkan):
I beg to move
That the Second Stage of the Ground Rents Bill (NIA 6/99) be agreed.
This Bill provides a statutory scheme for the redemption of ground rents on residential property in Northern Ireland. The problem this Bill seeks to address is the difficulty experienced in the conveyancing process in Northern Ireland due to the complexity of pyramids of title, of various fee farm grants and of long leasehold estates created by the ground rents system. Complex titles to property are particularly prevalent in certain areas of Belfast and larger towns. For older properties in particular it is not uncommon to discover that apart from the immediate rent owner's receiving the annual ground rent, there are perhaps several further layers of superior rent owners, each of whom is entitled to some payment of a ground rent from other superior rent owners below them in the pyramid.
This Ground Rents Bill has as its primary objective the simplification of land ownership in Northern Ireland. It is creating a scheme that will enable owners of residential properties subject to an annual ground rent to enlarge or convert their title into freehold titles, clear of any rent. The scheme will apply to both long leases and fee farm grants, a common system of land holding throughout both parts of this island. Upon redemption of the ground rent the a home owner will no longer have to pay an annual ground rent to the rent owner.
Other provisions of the Property (Northern Ireland) Order 1997, which came into operation earlier this year, already prohibit the creation of new fee farm grants for both residential and commercial property and long leases on residential property. The measures contained in this Bill complement those existing provisions by providing the mechanism whereby existing ground rents can be bought out or redeemed. These reforms are part of the wider policy objective of moving from leasehold to freehold title for residential property in Northern Ireland.
There are two elements to the redemption scheme. First, the Bill introduces a voluntary procedure whereby a rentpayer may redeem the ground rent on his or her property by making an application and paying certain moneys to the Land Registry. If the Registrar of Titles is satisfied that the correct procedure has been followed and the correct money lodged with him, he will issue a certificate of redemption which discharges the particular property from the ground rent.
Notice that the rentpayer has done so will be served on the ground rent owner who cannot object to redemption of the ground rent. On receipt of that notice, the owner can apply to the Land Registry to be paid the money lodged by the rentpayer. If the registrar is satisfied that the person making the application is entitled to the money, he will certify it accordingly, and the appropriate sum will be paid from the Consolidated Fund. The process should be relatively simple and straightforward for all those involved in the scheme, especially rentpayers and ground rent owners.
The second element of the scheme deals with the compulsory redemption of ground rents, which will apply when a house is sold. Whether it is registered or unregistered residential property, the purchaser will have to redeem the ground rent on the property before his or her new title can be registered by the Land Registry.
The purchaser will redeem the ground rent in the same way that a person voluntarily redeems ground rent, which is by applying to the Land Registry and paying money which is then claimed by the ground rent owner of the property purchased.
Will the Minister give way?
I shall not give way. I shall answer questions after I have made my statement.
On a point of order, Mr Deputy Speaker. This is most unusual. A Minister usually gives way when he is making a statement.
Mr Deputy Speaker:
It is entirely a matter for the Minister. There will be ample opportunity to question him after he has made his statement.
Mr P Robinson:
On a point of order, Mr Deputy Speaker. Will you make it clear that anybody with any parliamentary experience knows that a Minister never gives way when making a statement?
I was referring to money being paid into the Land Registry, which represents a reasonable level of compensation to the owner of the ground rent who, after redemption, will no longer receive that annual income. The compensation payable to the person redeeming the ground rent will be fixed according to a formula laid down in schedule 1 to the Bill, which provides for the amount of the annual ground rent to be multiplied by a fixed number of years. The Ground Rents Bill confers on me the power, by order, to fix the multiplier. I intend to fix the multiplier at 9, which, I believe, will result in fair compensation for ground rent owners, while not placing an undue financial burden on rentpayers, especially those who fall within the compulsory scheme. That figure is an accurate reflection of the purchase price that is currently paid when a ground rent is redeemed.
The Bill also confers on me the power to fix different multipliers for different categories of ground rent. I have no plans to exercise that power at present. However, in the light of experience of the scheme, I shall review whether adopting a single multiplier of 9 for all ground rents proves to be too crude a mechanism for balancing the competing interests of rentpayers and ground rent owners.
A third feature is that the Bill provides detailed provision for the continuation and enforceability of covenants affecting the property when the ground rent has been redeemed. The provisions in this Bill mirror existing provisions in the Property (Northern Ireland) Order 1997, which provide for the running of freehold covenants as between successors in title to the property, the ground rent of which has been redeemed. For example, the covenant for quiet enjoyment of the property will continue to bind the owner of the property even though he now has a freehold title.
There is, as yet, no fixed date for commencement of these provisions. However, I can give Members an indication of the order in which I intend to bring the various parts of the redemption scheme into force. When the necessary Land Registry rules are in place, I hope to introduce the voluntary redemption procedure early in 2001.
In respect of the compulsory redemption of ground rents I am proposing a phased introduction to tie in with the introduction of compulsory first registration to the whole of Northern Ireland. I intend that compulsory redemption should first be applied to unregistered residential property towards the end of 2001. Some time after that, and in the light of experience of how well the scheme is operating, I will extend compulsory redemption to registered residential property.
As I stated earlier, this Bill seeks to provide a simple scheme for the buying out of ground rents for both rentpayers and rent owners, with the minimum of expense to both. The Bill is, nevertheless, complex and deals with a very technical area of property law, but I commend it to the Assembly as useful reforming legislation which will help, in the long term, to simplify land ownership in Northern Ireland.
If Members raise any particular points during the debate I will try to answer them in my winding-up speech.
The Chairman of the Finance and Personnel Committee (Mr Molloy):
Go raibh maith agat, a LeasCheann Comhairle. I welcome the Bill as a first step in streamlining the whole issue of ground rent and rents across the country, but I do not think that it goes far enough. It deals primarily with dwellings and residential properties, but there are other major issues to do with absentee landlords and landlords of large estates, such as the Shaftesbury Estate, the Chichester Estate and others, who own large stretches of lands and water right across the country for which people are paying ground rent. Some of these areas of land are undeveloped because people refuse to pay the ground rent.
I am referring specifically to the bed of Lough Neagh, which is owned by the Shaftesbury Estate. Any of the councils in the area around Lough Neagh who want to develop along the shoreline or into the water have to pay the Shaftesbury Estate large amounts of ground rent to be able to do so. This has held up the whole development of Lough Neagh and has curtailed its use in many ways. I hope to see this legislation being extended to deal with that sort of issue.
There are many questions which have to be asked to compensation to landlords, many of whom would have difficulty in justifying their ownership of a particular piece of land, land that had been given to them in the past for their loyalty. It seems a bit strange to receive payment for something which did not belong to you in the first place. We also need to look at the matter of compensation in a number of ways.
I am quite certain a LeasCheann Comhairle that my Committee will be looking at all of these issues and that we will come back at the next stage - the Consideration Stage - with amendments if necessary.
The Deputy Chairman of the Finance and Personnel Committee (Mr Leslie):
I thank the Minister for his statement. This Bill is, I suppose, the most complex piece of legislation to have come before the Assembly so far, and I see that it is winging its way to the Committee on which I sit. Fortunately, we have had the chance to warm up on one or two other easier bits of legislation.
The Bill raises a number of issues. It appears to reflect a fairly diligent development process, but there are a number of items that I would like to put to the Minister to see if he can provide any comfort. I notice, in particular, that a short residuary term is defined in the legislation as 50 years or less, and the Minister has decided, as he has the discretion to do, that the multiplier should be nine. I think that you could argue that the multiplier should be 49 if a residuary term of 50 years is to stand. You could contend that a multiplier of 49 might be suitable for "groundrent.com", as it would not represent the commercial reality of the value of ground rents. Nonetheless, I think that there seems to be some inconsistency between those two situations.
What does the Minister consider the cost and administrative burden to the Land Registry of carrying out these proposals will be? He is entirely sensible in having a phased introduction so that the system can be tested and the extent of the burden established before the compulsory section is introduced.
Would-be property purchasers need to be aware that they will not feel the benefit of this Bill until a conveyance takes place subsequent to the one that triggers the tidying up of the ground rents issue. The first conveyance taking account of this Bill will simplify things, inasmuch as it will be clear what is to be done about ground rent. However, the complete simplification of the process will not bear fruit until the subsequent conveyance takes place. In that respect, the Bill is silent on the length of time a rent owner's right to a rent paid into the Consolidated Fund will last. Does that imply that the entitlement is perpetual?
In addition to having the discretion to set the multiplier, the Department of Finance and Personnel will determine the basis for the rate of interest paid on unclaimed redemption moneys. What basis will be used to determine that rate of interest, and will the interest be compound?
Clause 8 seems to give some scope to making spurious application to redeem ground rent. It would, in effect, deny the rent owner access to the property. The penalty for false action under clause 9 is contained in clause 24. It is as well that there is a penalty, but does the Minister consider that it will be sufficient to be effective.
Clearly, this Bill can affect mortgages and existing leases. What consultations have taken place with mortgage providers to ensure that section 15 of the Bill, which says that it does not affect the mortgage, satisfies all the concerns of mortgage providers that that will be the case? It would be extremely unfortunate if we were to pass a piece of legislation that leads to many mortgages having to be redocumented, inevitably at cost to the borrower.
I note that the Bill specifically excludes nominal rents of below £1, and clearly there is an argument that it would be uneconomic to try to redeem these rents. However, nominal rents are exceedingly tiresome, for the person receiving them, for the person paying them and, at the time of conveyance, for clearing up any arrears. Would it not be more sensible to have a voluntary provision for the redemption of nominal rent? The parties would be mindful that it might be of some net expense to them to clear up the nominal rent, but it might be considered to be of value. It would be worth considering if the multiplier for clearing up nominal rent should be higher in order to provide an incentive to clear them.
What consideration was given to the problems which occur when there are multiple, or joint, owners? Frequently, such owners disagree, and one of them can be left with the problem of having to sell the property and deal with the difficulties that that entails. Has sufficient consideration been given, in the framing of the legislation, to take account of this? The compulsory provision may deal with that, but what are the Minister's thoughts on this matter?
Finally, in overall terms this Bill should be welcomed. I look forward to receiving some comfort on the matters I have raised. This seems to be a very diligent attempt to simplify our complicated land law, which I hope will benefit buyers and sellers in the conveyancing process without further enriching the practitioners in that process.
I commend the Minister on the Ground Rents Bill, which, I am sure many Members agree, is long overdue. Will he say what will happen to the excess pieces of land that have been left by developers, who have moved on, and say something about absentee landlords who do not take responsibility for maintaining these small pockets of land, such as grass cutting, for example?
As I listened to the Minister, the Chairman and the Deputy Chairman of the Committee, one theme emerged. We all agree that this is complex and weighty legislation. I have no doubt that it will require deep soul-searching and concentration when it moves to the Committee stage. One need only glance through the Bill to find clauses which will create all sorts of problems and difficulties. I am thinking of issues such as superior rents, land of separate occupation that is subject to a single ground rent, the effect of the redemption on titles and the continuation of rights and equities affecting leasehold land. I could have a field day being really difficult and demanding answers from the Minister. However, he knows me well enough to know that I would not dare to bowl him any googlies at this early stage. They are all issues that must be dealt with comprehensively.
We must also consider the cost implications of additional staffing and the whole quasi-judicial aspects of how the measure will affect the Land Registry. Our purpose today is to deal with the principles in the Bill, the key one being the simplification of conveyancing. As a rather simple individual, I like things to be made simple. I support the principles in the Bill and look forward to further consideration in the Committee when amendments will be made to make life even more simple.
I too welcome the Bill and the sooner it becomes legislation, the better for everyone. There are some aspects about which I am concerned and require some clarification from the Minister.
We have a system whereby a substantial number of peppercorn rents are applied to properties across the Province. Since first introducing its scheme of selling off properties, the Housing Executive has sold off about 86,000 homes to date. All those properties are held with a 5p ground rent, if requested. The Housing Executive does not request those ground rents because it would be too costly to do so. Imagine trying to collect 86,000 5ps across the Province. Does the Bill deal adequately with that issue, which is causing considerable concern?
The Minister also mentioned that the multiplier is 9. I am not sure that I entirely agree with that. A more realistic multiplier would have been 12, and I say that because, if this Bill is to work properly, we need the co-operation of both landlord and tenant. An obstructionist policy could come into play if the landlord discovered that the multiplier was only 9, for that might not be enough to encourage him to get into the scheme. As I have said, 12 would probably be a more realistic figure, and it should be considered.
The legal costs accrued here by a tenant's buying out the ground rent will be considerable, and there are often long and protracted legal matters, particularly searches, which must be carried out. As one solicitor said to me, the legal costs are far in excess of the actual ground rent involved. We therefore need clarification on who will pay those legal costs. Will payment be initiated simply by the person who wishes to purchase, in this case, the tenant? Will landlords be discouraged when they see that they will also be involved in considerable legal costs, though the sums of money they receive will be minimal?
What is the position on mortgaged property? An owner will have to go back to his lender and secure his co-operation, so that will involve searches. This is going to be extremely time-consuming and protracted, and it will take a long time before an owner can purchase his ground rent.
I have also been asked to refer to the future purchase of Housing Executive properties. Will a redemption certificate be issued automatically when a Housing Executive tenant wishes to purchase his home, or will a ground rent of 5p continue to be applicable? I understand that the reasons for this are more legal than anything else. I hope a system can be devised whereby any Executive tenant purchasing his home in future will not find himself lumbered again with this clause.
Regarding a terrace of houses, I understand that there is an agreement at the moment called a header rental agreement, under which one person in a street collects all the ground rent, also becoming liable for it. Does the Bill deal adequately with that situation? If a person lives in the middle of a terrace of houses, can he purchase the ground rent on his home? I can envisage difficulties there, for, from what I have read, I assume that the Bill puts the onus on him to purchase the ground rent for the whole row. We should like to know how that will work out. I will be particularly interested in Mr Durkan's comments on the header rental agreement, since it is a significant matter in need of clarification.