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Baroness Denton of Wakefield: My Lords, I checked this matter before I raised it in the House. I am told by the offices of this House that there are no equivalents to these orders from any other parts of the United Kingdom. It is suggested that this may be a hangover from the days of the Stormont parliament. That is why I said we cannot possibly know the detail. That is why I raised the matter.

Lord Dubs: My Lords, I thank the noble Baroness for that comment. If I was not quite accurate in what I said, I shall look into the matter and write to the noble Baroness with the more accurate position.

I have referred already to the difficulties facing the flagged herds. The noble Baroness asked a very specific question about the particular support that was available last year and not this year. The position is that the payments made to flagged herd owners in 1996-97 were made under a European Community regulation which allowed for a one-off exceptional payment to address the difficult market circumstances brought about by the BSE crisis. All the aid allowed under that regulation has been paid. The aid package announced by my right honourable friend the Minister of Agriculture on 22nd December will be funded under a different scheme; that is, under the EU agrimonetary compensation schemes. The rules for that are very clear and aid is available only to offset the effects of sterling green rate revaluations. It will not allow for aid to be skewed to particular groups within an eligible sector. That is the difficulty with which we have been faced. I had originally wanted to provide more help for the farmers with flagged herds, as was possible when the noble Baroness was the Minister responsible.

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However, I have been told that it is not possible under the system and it is the Brussels arrangements which prevent that.

The noble Baroness asked also about central administration costs and why there is money included for them in the supplementary estimates. The money included for administration reflects the take-up of the end-year flexibility scheme, a number of transfers from GB departments, including administration costs for the Welfare to Work programme and reallocations within Northern Ireland departments.

The noble Baroness asked about the Omagh Veterinary Centre's costs. My department, DANI, is planning to introduce charges for its veterinary diagnostic services later this year. The department will monitor income against the cost of providing that service at the Stormont and Omagh laboratories.

The noble Baroness referred to overseas companies and asked about the position of Hualon. The company remains committed to investing in Northern Ireland but the exact timing and level of such investment are not clear. IDB remains in close contact with the company. On 6th October 1997 the European Court dismissed a final appeal mounted by the Trade Industry Association. The IDB has continued to maintain close contact with the company since that decision was taken. However, since the Asian crisis, the general situation in the world textile market has changed. Asia has become much more competitive for labour-intensive industries, such as garment manufacturing, and this has had a knock-on effect on textile companies such as Hualon. The current level of provision for selective financial assistance takes account of all known projects. There is no specific provision set aside for individual projects.

The noble Baroness asked about claw-back from successful IDB companies. This proposal would be seen by companies as penalising success and would adversely affect the competitive position of IDB. Such an IDB policy change would be seized upon and exploited by IDB's international competitors. The proposal would restrict industrial development activity in Northern Ireland at a time when we are seeking to maximise such activity.

Companies consider that the Government secure their return through taxes paid by both the company and its employees. The introduction of claw-back of grant where companies achieve profits above the agreed equity costs of capital would be regarded as government doubly penalising their success--taking a share of the profits as well as receiving more tax revenues. By seeking to clawback funds and profits, the amount of funding available to reinvest in business would be reduced. This would be particularly difficult to defend if employment in the company was also above target. Projects being considered by IDB for support have varying degrees of risk and uncertainty as to the eventual outcome. This proposal would, I fear, introduce further uncertainties into these projects.

The noble Baroness raised the issue of the provision and funding of water and sewage services. When I had the fortune to be appointed to my present responsibilities, I was given a number of presentations

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in the DoE about the various services and activities of the department. I was more shocked by the situation as regards the water and sewage services in Northern Ireland than by anything else. I have to tell the noble Baroness that my understanding is that there were years of neglect by her government of the water and sewage services. The money was simply not made available and the sewage services in particular are in a very unsatisfactory state.

I am looking at the options for the future organisational and charging arrangements for the provision of water and sewage services in Northern Ireland. That is to say, I am reviewing them at present. In the near future, I hope to publish a consultation paper seeking views about the provision of such services, including methods of raising money to pay for them, leading to decisions about the way ahead by the summer of 1998. This is a very difficult area and it is urgent for us to take decisions to ensure that we maintain high standards in the water and sewage services.

I believe that the noble Baroness also asked about the Assets Register and the arrangements that have been made in that respect. The comprehensive spending review requires departments to examine whether they are making the best use of their assets and to identify surplus assets which could be sold. The Assets Register is a vital tool in the process and departments are examining all their assets as part of the review. That is very much underway at the moment.

As regards the rationalisation of hospital services in Belfast, my honourable friend who is responsible for the Department of Health and Social Services is currently considering these proposals. They give rise to difficult issues which it is important for us to take time to get right. I am sure that the noble Baroness will be in agreement with that.

The noble Baroness also asked about the inward investment effort and questioned why we had poor results from Singaporean and Taiwanese companies. We attempt to make a balanced effort to attract inward investment from around the world and we remain flexible in targeting effort and resources to areas where the prospects are best. Clearly we will have to look at all the countries from which we can attract more inward investment.

The noble Baroness also asked about public consultation on expenditures. The Government believe in consultation, and a very extensive consultation on the comprehensive spending review was undertaken last year. This is being considered in the review.

I thank the noble Lord, Lord Lyell, for the good wishes he expressed and I note his eagerness to have me go to the exhibition in Paris. My officials will take note of that and I shall have to see what advice they give me. I have to be careful about how many trips I go on because I do not want to be absent from Northern Ireland more than I need. Otherwise, people might start talking.

The noble Lord talked about the take-up of agricultural grants. I recognise the importance of grants to the farming industry. The main capital grants being paid to farmers at the moment under SPARD, FACES

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and the Farm and Conservation Grant Scheme are oversubscribed, and DANI is therefore unable to improve on the take-up rate.

The noble Lord referred to LEADER. I am not sure whether I have misunderstood him. I had the feeling that some of the things he said referred to the SPARD scheme, which is the one that was immediately oversubscribed when it was opened, before I took office. It was oversubscribed within two days and had to be closed simply because there was not the money to pay. We are now paying it off year by year. The difficulty with the scheme is that it was open-ended and had very few criteria which could limit the demand. That has been a real difficulty. However, as I said in my introduction, I have managed to take £5 million from next year into this year so as to pay off more of the farmers who have been waiting very patiently.

The noble Viscount, Lord Brookeborough, made the point that farm incomes have dropped rapidly. I am aware of that and have had many discussions with the UFU, NIAPA and individual farmers about the difficulties they are facing. The problem is that they are facing these difficulties across the whole sector of agriculture and not just in any one part of it. I was at a meeting not long ago when the Prime Minister met farming unions from all over the UK, including from Northern Ireland, and we had a discussion about this. Some money has been made available by my right honourable friend the Minister of Agriculture. He made an announcement before Christmas and some further announcements have been made. We are doing the best we can to help, but it is difficult because some of the problem stems from the value of the pound sterling against other currencies. That affects all sectors of the economy and not just agriculture.

The noble Viscount, Lord Brookeborough, referred to farm diversification and the LEADER programme. I wonder whether he was talking about SPARD rather than the LEADER programme. If I have misunderstood him, I shall write and let him know. The review of SPARD has to take account of the fact that all financial provisions under the scheme have been committed by applications received up to 24th March 1995. The review includes in its remit the question of additional funding. Everyone whose application has been acknowledged will be entitled to grant aid if they do the work and submit a claim as per the SPARD scheme.

The noble Viscount also referred to LEADER and rural development applications being frozen. I am not aware of any grants that have been frozen where letters of offer have been issued.

The noble Viscount also talked about the FEAR--Fear Encouraged Abandoning Roots--scheme. The Government are aware of the difficulties faced by those who were displaced. Indeed, the Secretary of State has recently met with the FEAR group to hear their concerns. As matters stand at present, there is no provision for retrospectively claiming grants or subsidies in these circumstances. But I know the

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Government are aware of the difficulties facing these people and I shall certainly reconsider the position in the light of what the noble Viscount said.

As regards alternative strategies for hill farmers, the agri-monetary package announced by Ministers in December includes supplementary payments to suckler cow premium and sheep annual premium claimants. A significant number of these are hill farmers. In particular, the additional sheep payment includes an increase in the rural world supplement paid to less favoured area producers. We have tried to target the help where it is most needed. I hope the noble Lord will accept that that is an effective way of doing it.

The noble Lord asked about additional houses on farms and planning permission. Planning permission may be granted for a house on a farm where it is essential to the needs of the farm, but what we cannot do is simply say that all planning controls in the countryside will no longer apply. We have to be careful that we retain the beauties of the countryside. However, planning permissions certainly are granted from time to time where they meet the criteria. I have just indicated an example of that.

The noble Lord asked why planning implementation is different in different areas. The planning service aims to treat all applications fairly. If the noble Lord can provide me with details of specific cases where that appears not to be the case, I shall be happy to have them investigated. As regards the closure of rural schools, proposals for the closure of any school in Northern Ireland are subject to ministerial approval, as they are in Britain. I think that is the assurance that the noble Lord seeks.

The noble Lord, Lord Molyneaux, asked about the Belfast to Larne road and whether it would be upgraded. While the existing Belfast to Larne road is considered capable of carrying current and projected traffic volumes, the long-term benefits of further dualling the route are recognised. Schemes to achieve this are included in the six to 15 year major roadworks programme, where they will be implemented at a pace dictated by the level of finance available and the competition from other schemes across the whole of Northern Ireland. In case the noble Lord thinks that is utterly pessimistic, in the context of the comprehensive spending review we have been looking at all these matters and, although I cannot give him any particular hope, I am aware through my visits to councils all over Northern Ireland that there is much pressure for improvements, upgrading and dualling of roads. I have had several discussions with councillors about that road and I am well aware of local concerns, but at this stage I cannot offer the noble Lord any more immediate comfort.

As regards the announcement made by the president of the European Union, Jacques Santer, on the additional £88 million under the peace and reconciliation scheme, that has to be spent in terms of the criteria for peace and reconciliation. I very much doubt whether they would extend to the road scheme that has been suggested. I do not think that will work but it was a good effort on the noble Lord's part!

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The noble Lord, Lord Cope, said there may be an assembly next year and some of these debates will no longer take place here. We hope that will be the case. He asked about resource accounting. The resource accounting and budgeting process continues in line with the timetable set out in the July 1995 White Paper, Better Accounting for the Taxpayers' Money. Generally all departments are on target to have the necessary accounting systems in place by April 1998 so as to produce resource accounts for the year ending 31st March 1999. He asked about unemployment figures. The employment figures that I mentioned refer to September 1997, but the unemployment figure of 7.9 per cent. refers to January 1998, which I think is as up to date as we can get.

The noble Lord also referred to criticisms of over payments by the Department of Social Security, which does not, of course, operate in Northern Ireland. In Northern Ireland responsibility for the administration of Disability Living Allowance and Income Support rests with the Social Security Agency. We are, of course, careful to ensure that such payments are made properly. The agency has in place a strategy to tackle the problem of incorrect payments and to detect and prevent fraud. This also involves action to improve adjudication standards to ensure that people receive the benefits to which they are entitled. He also asked about fraud in the Department of Finance and Personnel. This is an intricate fraud involving collusion between a civil servant and outside suppliers. The collusion consisted primarily of falsifying invoices, some in the names of fictitious companies. Investigation of the fraud has been conducted by the Royal Ulster Constabulary, and the Director of Public Prosecutions' review of the evidence is at an advanced stage.

I think that I have dealt with all the points. In so far as I have not, I shall ensure that I write to noble Lords. I regret that I have taken rather long on this but noble Lords asked the questions and I felt that I had to give the answers.

On Question, Motion agreed to.

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