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Budget (Northern Ireland) Order 2007

I thank the Lord President for presenting the Budget as she has. I take the opportunity to welcome her back to the seat that she enjoyed for some time in the past and congratulate her on the speed with which she flew in from Iraq. Traditionally, we use this debate as a general discussion on the Northern Ireland economy. It is the only real economic debate that we have, bearing in mind that at this end of the Palace we usually do not deal with budgetary matters. However, there are a number of issues that I am sure noble Lords will want to raise. I should like to raise some general points. First, let us hope that this is the last time that we are asked to debate the Northern Ireland Budget. I have said that several times before, but I sincerely hope that we have arrived at the end of the road. Nevertheless, let us take a brief look at the general state of the Northern Ireland economy. People are saying that the economy is in a strong state, and it is. But I should like to be reassured that the Government, while they are in control, are aware of and taking action on a number of areas that could give cause for concern. We currently have low unemployment—the last quarter of last year was the lowest I have see—but it is starting to edge up again. House prices have risen at a faster rate than anywhere else in the United Kingdom in the past three months. It is already causing a significant problem for first-time buyers, a problem which has also been felt elsewhere in the United Kingdom. People are saying that a generation gap is about to appear, with a whole generation of first-time buyers unable to get on to the housing ladder. It is very important that those who are currently responsible for running the country look at the issue, make a plan, and deal with it. I declare an interest as a member of the National House-Building Council and chairman of the Northern Ireland committee. In previous years we have talked in this debate about public servants’ huge dependence on the economy and the public sector input to the economy. Those numbers are still way above anything that could be considered safe, solid and sensible. Although the Government have talked about that a lot, as far as I can see they have done very little to change the balance. It really does need to be addressed. People have talked about changing tax regimes and so on. The Chancellor will have his say and will make up his mind. However, I have lived with the corporation tax difference between Dublin and Belfast since the 1970s, when I started running businesses there and was looking for inward investment, and I can see the practical difficulties involved in that. We need to address that problem to ensure that the Northern Ireland economy is more self-sufficient and less dependent on government funding of one sort or another. We are also in an era, which is the same on this side of the water, where bank rates are rising—they have risen quite quickly recently—inflation is undoubtedly rising and significant indirect taxation has taken place. That is coming through now and—in my simple opinion; I am not an economist—is forcing the inflation rate upwards. With the addition of the on-costs of the water rates and rates, another indirect tax, I can see that the whole economy will be under enormous pressure. I should like to hear the Government’s ideas on how to manage that. Our economy has benefited considerably from the rich economy of the south and a lot of cash is still flowing northwards. In the 30 to 40 years in which I have been involved in business in Northern Ireland, the economy has always fluctuated one way or another. At the moment, Northern Ireland is benefiting from the strength of the economy in the Republic. But I would like to feel that actions are being taken to move our economy upwards and for it to be strengthened. In opening, the noble Baroness mentioned the review of local administration. I have complained before from this Dispatch Box about the lack of movement and the huge waste in the administration of Northern Ireland. It is a classic example of serious over-government, over-regulation and over-bureaucracy. It needs to change. I know that the plans are there and that we are talking about reducing the number of local authorities from 26 to seven and streamlining the hospital trusts and the education and library boards. But when will it happen? How quickly will it happen? When and what benefits will feed into the Northern Ireland Budget system? Further, the key cash eaters of our Budget, as they should be, are education, health and to some extent the environment. We know that the number of pupils in full-time education is dropping significantly year on year. I believe that 80,000 places are unfilled in the education system. I thank officials for helping me with that figure yesterday, and see one of them nodding now. That calls for quick rationalisation. We do not need the same number of teachers for 80,000 fewer pupils. Where is the rationalisation? When will it come? Health is also an eater of cash. My view of the health service in Northern Ireland—as an only occasional user, thank goodness—is that it is still nothing like as good as it was 25 years ago. It, too, is over-administered and over-governed. I turn to another bête noire of mine: the amount of money that is very often wasted on spin—on selling spin. I have in front of me the House of Commons Hansard from 19 December 2006, which contains a Written Answer to a Question asked by my honourable friend David Lidington. It shows the expenditure on press, public relations, publicity, communications work and advertising. The advertising figure for Enterprise, Trade and Investment for 2005-06 was £172,254; and the estimate for 2006-07 was £1,071,710. For Environment, the figure for 2005-06 was £1,554,283; and the estimate for the current year was £2,845,744. That is almost a doubling. For Health, Social Services and Public Safety, the numbers are not so big, but the percentage increase is enormous, from £272,284 to £626,500. The Regional Development figure in 2005-06 was £46,910; and the estimate for this year is around £1,070,000. I would be grateful if we could have an explanation for those figures. It is one of the areas that I have been complaining about. The waste of money on consultations, dressed up glossy documents and the money spent on consultants is all part of the heavy, over-bureaucratic administration that we have been complaining about for some time. With those few words to start with, I leave it to my colleagues to continue.