§ 7.15 p.m.
§ THE MINISTER OF STATE FOR NORTHERN IRELAND (LORD WINDLESHAM) rose to move, That the Finance (Northern Ireland) Order 1972, laid before the House on July 28, be approved. The noble Lord said: My Lords, I beg to move that the Order standing in my name on the Order Paper be approved. This Order is a purely financial measure which makes certain changes in taxation and financial administration in Northern Ireland. It might be helpful if I were to explain shortly why 1359 it is necessary for Parliament at Westminster to consider a measure dealing with taxation for Northern Ireland alone in addition to the Finance Bill which relates to taxation over the whole of the United Kingdom. The reason lies in the distinction between those matters 'which were reserved to Westminster in the Government of Ireland Act 1920 and subsequent legislation, and those which were transferred to the Parliament of Northern Ireland. Thus, a number of specified forms of taxation are reserved to the United Kingdom Parliament, while the remaining powers of taxation are transferred to Stormont.
§ The reserved taxes include all the main ones, such as income tax, surtax, corporation tax, capital gains tax, purchase tax, and now value added tax. They also include other Customs and Excise duties which are levied on goods: in particular, the duties on drink, tobacco and hydrocarbon oils. For these taxes Northern Ireland is in no different position from any other part of the United Kingdom. They are imposed by legislation at Westminster and are collected by the same United Kingdom revenue departments; that is to say, the Inland Revenue and Customs and Excise. The annual Finance Bills at Westminster therefore apply to Northern Ireland as well as to the rest of the United Kingdom so far as the reserved taxes are concerned. The transferred taxes include estate duty, motor vehicle duties, stamp duties, betting duties and S.E.T., including refunds. These are significant taxes, but they amount to very much less than the reserved taxes to which I have just referred. To put the matter in perspective, I might mention that the entire net proceeds of the transferred taxes amounted to less than the reduction in reserved taxes effected by this year's Finance Act.
§ The basic principle guiding the financial relationship between Northern Ireland and the rest of the United Kingdom is what is known as the policy of parity. This means that people throughout the United Kingdom should so far as possible receive the same level of benefits and services provided by the State, and pay the same level of taxation. Thus, it has been the practice of the Northern Ireland Government to present 1360 its Budget shortly after the United Kingdom, and to follow this with a Northern Ireland Finance Bill which makes any necessary changes in transferred taxes and deals with other matters of financial administration.
§ This year, because the Parliament of Northern Ireland was prorogued at Easter, the White Paper entitled Northern Ireland: Financial Arrangements and Legislation (Cmnd. 4998) served a similar purpose to the normal Northern Ireland Budget Statement by the Minister of Finance at Stormont, and the Order which we are considering this evening takes the place of the Northern Ireland Finance Bill. It will be seen that it deals in the main with estate duty, stamp duties, Excise duties on mechanically propelled vehicles and with betting duty. Each of those items represents a coming together, a parity, in that they bring Northern Ireland taxes into line with what already applies in Great Britain.
§ Article 16 and Article 17 (that is, Part V of the Order), however, on selective employment tax, represent a new and exceptional provision for Northern Ireland. On July 27 an announcement was made of a series of measures designed to support and to expand the Northern Ireland economy in the present very difficult circumstances. One of these measures, and one that could take immediate effect, was the refund of S.E.T. in so far as it is not refunded under existing arrangements. These refunds, which take effect from July 31 this year until the tax ceases at the end of the financial year, will cost about £3½ million and will have a widespread effect through Northern Ireland. They will benefit the whole range of service industries, in particular building and construction, which are very important providers of employment, and also the retail trade which has suffered severely in many areas from the present disturbed conditions. The injection of this cash into the economy should have a general stimulating effect and, by reducing the cost of employing labour, should tend to encourage employment.
§ Before closing, my Lords, I might just mention two further provisions in the Order concerned with financial administration. These are contained in Part VII of the Order. The first is that the 1361 Road Fund will be abolished on April 1 next, when roads will become a Government responsibility and the Fund, which is concerned mainly with grants to local road authorities, will then have no further purpose. Secondly, in Article 20 power is provided to make a temporary increase of up to £10 million in the Civil Contingencies Fund. This Fund is similar to the United Kingdom Contingencies Fund. It is used to finance expenditure pending grant of Supply by Parliament in cases where the public interest makes it impossible to postpone expenditure until the necessary funds have been voted. In the case of Northern Ireland, civil disturbances have led to greatly increased claims for compensation for personal injuries and for damage to property. In addition, the existence of a contingencies fund enables the Government to make special provision for additional assistance to the Northern Ireland economy as a whole, as and when it is necessary to do so. My Lords, I think on a financial measure of this sort that is all that it is necessary for me to say in moving the Order. I beg to move.
§ Moved, That the Finance (Northern Ireland) Order 1972, laid before the House on 28th July, be approved.—(Lord Windlesham.)
§ 7.22 p.m.
My Lords, before I reply to the noble Lord I think I am bound again to make a comment on the procedure under which we are working at the moment. We have been receiving a lot of extremely bad procedural advice from the Government in relation to the European Communities Bill, but now I find that they cannot even manage the procedure in your Lordships' House. A few minutes ago the Government Chief Whip moved that the House be resumed for half an hour. It is really not possible for a Committee of the House to instruct the House as to what it should do, and if by any chance this debate were to go on for longer than half an hour we should then be in a position of disobeying an order from the Committee which the Committee anyhow had not the power to give. I only mention this now because unless noble Lords wish to speak on this subject we may end very soon, and before the next procedural Motion is moved by the Government I hope they will know precisely what it is. As I was saying 1362 to the Government Chief Whip, it is not possible in Committee to move that the House be resumed for half an hour. The House can decide, but the Committee cannot tell the House. I do not know whether the noble and learned Lord—the noble Lord wishes to comment?
§ LORD DENHAM
My Lords, I take the noble Lord's point, and from his great experience I am sure he is much better on procedure than I am. I will certainly look into this point and if he is right, as I somewhat suspect he may be, I will make sure that such a mistake is not made again. If he is wrong I shall take very great pleasure in telling him so.
§ LORD SHACKLETON
My Lords, I really made that point only because we ought not to do that sort of thing. We had the satisfaction of seeing the noble and learned Lord the Lord Chancellor sitting on the Woolsack when the House was still in Committee, and it is a measure of the total confusion which the Government—and indeed Parliament—are in, owing to the enormous overloading of the Parliamentary programme. It is a remarkable thing that, thanks to the Opposition, the House keeps such a good temper. if I may say so, it bears out—and I am really only doing my best to fill in this half hour, and I admit that I am nearly getting out of order—the fact that we have had some bad procedural advice earlier. Does the noble Viscount, Lord Amory, wish to advise us?
§ VISCOUNT AMORY
My Lords, in view of what the noble Lord, Lord Shackleton, has said I must clearly keep my question very short indeed. I think some of us laymen feel a little dazed after the legal exchanges which took place between the noble and learned Lord the Lord Chancellor and the noble and learned Lord, Lord Stow Hill. However, if I can recover my thoughts sufficiently may I ask this question of my noble friend Lord Windlesham? I seem to remember that years ago there was an Instrument called the Imperial Contribution, being the means by which a subsidy——
§ LORD SHACKLETON
My Lords, may I interrupt the noble Viscount? I had not actually finished making my speech, and since I have the right to speak only once I should like to finish. I 1363 thought the noble Viscount wanted to advise us on procedure.
§ VISCOUNT AMORY
My Lords, I apologise. I thought the noble Lord was inviting me, if I was going to utter at all, to utter then and there. I do apologise.
§ LORD SHACKLETON
No, my Lords; I just thought that the noble Viscount might be going to produce some new, vague procedural point.
Since I can speak only once I merely wanted to thank the noble Lord, Lord Windlesham, for his usual clear explanation. This particular Order is more closely analogous to a Finance Bill than any other Northern Irish Order we have had, and, in the same way, although in theory we have power in this House to debate a Finance Bill it is usual for us instead to have a general debate on the economic situation. Sometimes, as this year and as your Lordships will recall (and it must be a subject for great envy in the House of Commons) we actually pass the Finance Bill "on the nod". It would therefore be inappropriate for us to go much further than the noble Lord, Lord Windlesham, who has explained the effect of the Order. It is just worth commenting, with some interest, that the amount of the transferred taxes is a small proportion in comparison with those which—I do not know whether they are called Imperial taxes——
§ LORD SHACKLETON
The reserve taxes, and again I think this perhaps suggests the extent to which Northern Ireland depends a great deal upon the support of the United Kingdom as a whole. I do not wish to make a point in criticism, but it has a bearing on the impossibility of a U.D.I. approach. I am sure that the noble Lord, Lord Windlesham, feels that.
It is interesting to see that the Road Fund has just been abolished. It is normal, of course, for Northern Irish taxation to remain pretty much in line with ours, and I was interested to see that the subject of the Road Fund has reappeared, and that it is dealt with in this legislation. It is satisfactory also in connection with the measures that we 1364 took in the field of artistic and other inheritances that there is the same provision in Northern Ireland for the waiving of estate duty under the same conditions as in this country. I think we must welcome the provision for further funds for compensation, and the possible speeding up, which I gather the Government are anxious to ensure, of payment of this compensation. Although we are now discussing dry figures, none the less we have to recall all the time that it is against the background of the present tragedy of Northern Ireland, and I do not think anyone in your Lordships' House would be disposed to query what is essentially a piece of Northern Ireland legislation.
If I had known that the Government Chief Whip was going to be so generous in the provision of time for us on this Order I would perhaps have asked the Government to provide some further information on the situation in Northern Ireland, but I take this opportunity of telling the noble Lord, Lord Windlesham, that he, like Mr. Whitelaw, has the support, I would say, not only of the great majority of the House but of the whole House in the work that he and Mr. Whitelaw are carrying on. I recognise that they are in for a hot and, in a political and perhaps other sense, difficult summer and autumn. We wish them luck and we are anxious to encourage them to persevere with the patience and determination they have shown.
I urge the noble Lord to take the opportunity of reporting to your Lordships' House. We are at present the only House sitting in Parliament, and I hope that the public are aware that the House of Lords is looking after their interests, just as we shall do in September when the other place is further afield. The fact that we shall be rising in time for the Twelfth is entirely coincidental, in that it meets the wishes of the Labour Opposition. If the noble Lord, Lord Windlesham, will bear in mind the possibility of making a Statement, he may think it desirable to make one in Parliament, and if he has some news perhaps he will make a Statement tomorrow.
Meanwhile, this Order, which is clearly within the vires of the emergency legislation, can, from our point of view, be passed without difficulty, and I hope that this is the last time that an Instrument 1365 of this kind will come before the House—this is an exceptional case because of its financial nature—without our having the sort of new procedure which I hope will be agreed in another place and which we and the noble Lord are anxious to see put into effect.
§ 7.32 p.m.
§ VISCOUNT AMORY
My Lords, may I once again apologise to the noble Lord, Lord Shackleton? The last thing that I would wish to do is to interrupt him. I think it happened because he gestured towards me and referred to me as " learned—a designation which he instantly withdrew. I thought for a moment that he was anxious to help to fill up the interval which has occurred.
I wish in the main to make two points. First, I cordially and strongly support what the noble Lord, Lord Shackleton, said about the Secretary of State for Northern Ireland and my noble friend. The whole House wishes them well. Secondly, the compensation figure that one understands has already been reached is a reminder of the scale of damage that is being done. Although the figure in itself is very serious, it shrinks into insignificance compared with the human damage that is resulting from the present troubles. I rise simply to ask a minor technical question of my noble friend. There used to be an Instrument known as the Imperial Contribution. It was a balancing figure. Am I right in assuming that in the present circumstances the Imperial Contribution has become a rather meaningless phrase? More than likely it has dropped out of use.
§ 7.34 p.m.
§ VISCOUNT MASSEREENE AND FERRARD
My Lords, while thanking my noble friend for his statement, may I add my hope that the compensation will be paid with extreme urgency, for I know of several cases where people are in dire straits, having had their premises destroyed. The position is particularly difficult for some small traders. I implore my noble friend to do everything he can to speed up the payment of compensation. My experience has been that the civil servants, who have my admiration, are not always the most speedy of people when it comes to paying funds that are due. I hope that in this instance there 1366 will be no such delays in the payment of compensation.
§ 7.35 p.m.
§ LORD WINDLESHAM
My Lords, I am grateful for the reception which is being given to this Order. The flexibility of our procedure enables us to discuss quite a wide range of matters, which is one of the advantages of our being able to conduct the business of this House in our own unique way. The main point of substance to arise is the question of compensation. I assure your Lordships that this is a matter of great concern to people in Northern Ireland who have received personal injuries or whose property has been damaged. The amounts involved are now very substantial indeed. When the Co-operative Store in York Street was blown up the approximate value was £1 million. That was exceptional, of course, but it gives some indication of the amounts that can be involved.
The legislation is under two main heads. The Criminal Injuries to Persons (Compensation) Act (Northern Ireland) 1968 provides statutory rights for compensation for physical injury or death, and over £1.8 million has already been paid under this Act. In addition, grants in aid of £20,000 and £30,000 were made by the Government of Northern Ireland in 1971–72 to the Army Benevolent Fund in respect of members of the Armed Forces and Royal Ulster Constabulary Widows' and Dependents' Fund respectively. Compensation for malicious damage to property is provided for under the Criminal Injuries Acts (Northern Ireland) 1956 to 1970. A number of Acts have been made necessary by the events of the last few years. Since 1968 payments for damage to property under these Acts have amounted to over £15 million.
Claims lie against the county borough councils concerned and are adjudicated by the appropriate court, the recorder's court or the county court. The volume of claims has caused great difficulties for the local authorities but considerable progress has been made in building up staff and machinery to meet the situation. Special courts are sitting and extra statutory arrangements have been made to enable small claims to be settled without recourse to the courts and for special advances of financial aid to be made 1367 pending an eventual award through the courts. The difficulty here, of course, lies in arriving at an agreed valuation, particularly with small claims—claims of under £1,000—and every effort is made to agree a claim without having to go through the county court. But if the claimant is not satisfied with the proposed figure he has the right to go to the court and obtain compensation for an agreed sum. The delay between submission and settlement of a claim now varies between two and six months, which is a great improvement. At one time it was anything up to eighteen months between the incident which gave rise to the claim for compensation and the settlement in the court. If I have a few minutes left till 7.45 p.m. it might be convenient——
§ LORD SHACKLETON
My Lords, might I interrupt the noble Lord to inform him that he has as long as he likes? The House will ignore the entirely improper Motion which was moved by the Government Chief Whip and which was accepted by the Committee but not by this House.
§ LORD WINDLESHAM
My Lords, it would be most rash of any member of the Government Front Bench to ignore anything said by the Government Chief Whip. Perhaps, as an aside, I might say to my noble friend Lord Massereene and Ferrard that I had the pleasure of visiting Antrim recently where I noticed that his former family home will shortly be converted into public gardens and a public park. I am sure that this will bring great benefit to the people of Antrim and that his family name, in the form of Massereene Park, will be on everybody's lips.
The slight delay between the first and second contributions to the debate by the noble Viscount, Lord Amory, enables me to give him an even fuller and more accurate answer than would otherwise have been the case. He asked about the Imperial Contribution, and I understand that this is the amount of Northern Ireland reserved revenue which is retained in the United Kingdom Exchequer as a contribution towards national expenditure such as defence, the national debt, and so on. In present circumstances and for some years 1368 past the contribution has been reduced to a token figure. In fact, even that token figure can be paid only after Northern Ireland has received substantial assistance over and above the revenue raised there.
What I could perhaps commend to the noble Viscount, which I think he would find of general interest, is the White Paper published by the Secretary of State for Northern Ireland and the Chief Secretary to the Treasury in June, 1972. That was titled, Northern Ireland: Financial Arrangements and Legislation, Cmnd. 4998, to which I referred in moving the Order. On pages 5 and 6 of the White Paper there are paragraphs under the general heading "Supplements to Tax Revenue". These total approximately £133 million, and although in many ways it is difficult to find an actual figure for the amount of additional financial assistance which goes from the United Kingdom as a whole to Northern Ireland, that figure, which covers the items listed in the White Paper, is not a bad one to work on.
The noble Lord, Lord Shackleton, whom I should like once again to thank very much indeed for his kind words to the Secretary of State and those of us who are working with him, commented on the significant fact that during September this House will be the only House of Parliament sitting. I shall be answering a Question on Northern Ireland tomorrow but I do not think it would be appropriate to consider a Statement at such short notice as that. I would, however, like to take note of what he has said about the latter period next month when the House is sitting. If there is any information which should be brought before your Lordships and if I can provide an opportunity to answer Questions and explain the Secretary of State's policy and the progress made, I shall be happy to do so.
My Lords, that covers fairly fully all the points that were raised in this short and interesting debate, and if the Order now has the consent of your Lordships, as I hope it does, and if other noble Lords are ready to resume with the other business, I beg to move that the Order be now approved.
§ [The Sitting was suspended at 7.43 p.m. until 7.45 p.m.]