Northern Ireland Assembly, 1 October 2001

102 contributions from 48 members. The official report.

Martin O’Hagan

Brid Rodgers (Social Democratic and Labour Party, Upper Bann)

On a point of order, Mr Speaker. The Assembly will be aware that in Lurgan this weekend we witnessed the brutal murder of a member of the press, the journalist Martin O’Hagan. I propose that, as the central democratic institution in Northern Ireland, the Assembly be suspended for half an hour as a mark of respect and as an expression of our sympathy and horror over what has happened. This was an attack not just on a human being and on a family, but on the basic and fundamental democratic right to free speech and to freedom of expression.

John (Speaker, Belfast East)

The Assembly does not normally suspend without discussion through the usual channels, unless there is a threat or actual disorder in the Chamber. There is no doubt, however, that this event was particularly repugnant. We try to live in a democratic society, and this was a clear attack on it. Perhaps there is no group of people closer to us than members of the press, except perhaps other Members of the House and members of staff.

Martin O’Hagan was undoubtedly known to most if not all Members of the Assembly. However, to suspend at this time and show the cameras simply an empty House, and for people to busy themselves with other things would not, perhaps, be the right thing to do. It might be better if Members were to stand in their places and show the people of Northern Ireland a House united in reflection on the life, the work and the devotion to duty of Mr O’Hagan. It would also be a reflection on the tragedy for his wife and his family circle. The House should stand together in defiant repugnance of this awful event.

In response to the point of order, I ask the House to stand together in silent reflection for two minutes on the murder of Mr Martin O’Hagan.

Members observed two minutes’ silence.

John (Speaker, Belfast East)

It is difficult to turn our minds to more ordinary responsibilities, but it is our duty to do so.

Assembly: Suspension of Standing Orders

Aerospace Industry

John (Speaker, Belfast East)

I have received notice from the Minister of Enterprise, Trade and Investment that he wishes to make a statement on the consequences that the terrorist attacks in the United States are having on the aerospace industry.

Reg Empey (UUP, Belfast East)

A copy of my statement will be available shortly. I apologise for its not being available now, but I am sure that Members can appreciate that its contents are continuously changing. I hope that it will be circulated shortly.

As we meet today, Northern Ireland is facing, by any standards, its stiffest economic test in over a decade. We are not, of course, immune to world conditions, and we cannot be insulated against the chill of recessions. However, we are not entirely helpless; there are measures that we can take to help minimise the impact. We can and must fight back. We cannot single-handedly reverse international trends, but we can use our influence to apply the brakes as world markets talk themselves into a tailspin.

In just six days, Northern Ireland has been dealt a number of severe blows, and more bleak economic news is likely. The livelihoods of thousands of people, through no fault of their own, are threatened by terrorism. Even before the appalling events of 11 September, all indicators pointed to troubled waters ahead. What happened in New York, Washington and Pittsburgh catapulted us into an economic crisis.

Those who plotted and planned the dreadful attack on the United States also calculated the effects that their actions would have on world markets. Not only were they determined to cause colossal loss of life, but they were fixed on exploiting the mayhem that they would cause. They wanted to kill on an unimaginable scale and, in the ensuing uncertainty and chaos, profit from their murderous acts and force markets into free fall. That way, the free world would be dealt a double blow.

Since 11 September, we have held our breath, knowing that Northern Ireland would not escape unscathed but hoping that the tidal wave would inflict minimal damage on our economy. We saw the fallout last week. The first company affected was Bombardier Aerospace, then it was British Airways, followed on Friday by Aer Lingus. Aircraft manufacturers and airlines have been the first to suffer. At its bleakest, the crisis could cause the loss of more than 2,200 well-paid jobs. The families involved will be traumatised, and the local economy will be shaken. Hundreds more who work in downstream businesses are waiting to see how they will be affected.

If the downward momentum is not arrested, the number of economic casualties will grow. We must seek ways of averting further decline, as well as ways of cushioning the blow. There is a world of difference between realistic assessment and self-fulfilling gloom; between slow-down and full-blown global recession. No one can deny the extent of the difficulties, but I see little point in talking our way into a doomsday scenario. Instead of queuing up to join the legions of pessimists, we should explore ways of getting off the treadmill of despondency. Instead of rushing to the lifeboats, we should set about reinvigorating the global economy. Instead of doing the work of the terrorists, we should have as our local, national and international objective the protection of the democratic way of life and the defeat of the madmen who would destroy it.

In the first instance, a co-ordinated global response to the economic difficulties and a similarly co-ordinated approach to creating the conditions for future growth will be required. Northern Ireland’s role in the global economy is limited. There is little that we can do in isolation. Our immediate task is to ensure that we take whatever steps we can to protect the local economy and assist our companies to remain competitive in an uncertain environment.

We must also ensure that Northern Ireland is positioned to take advantage of the inevitable global economic rebound. We are all deeply concerned about the situation and will seek to provide the positive leadership that the community has a right to expect. As an integral part of the United Kingdom and of the European Union, we will press for an early response to the current economic situation.

The management of Bombardier Aerospace has assured me of the group’s total commitment to its Northern Ireland operations and of its intention to resume recruitment when the global airline business recovers confidence. In my discussions with the local management, I was told that the fate of some of the 1,100 jobs in the second tranche of redundancies depended on the situation in the market in the new year. We must hope that the downturn in the aerospace industry is short-lived. However, most analysts expect the current problems to stretch well into the second half of next year, so we must be prepared for the long haul.

Bombardier Aerospace is deeply rooted in Northern Ireland and has invested over £1 billion here since 1989. The sites here are now an integral part of Bombardier Aerospace, which is heavily dependent on the sophisticated components that they continue to provide for virtually all its aircraft programmes. The group will require the expertise and facilities in Belfast and other parts of the Province when a decision is taken to ramp up production.

Bombardier Aerospace is the world’s third-biggest commercial aircraft manufacturer and makes an immense contribution to the local economy. It is our biggest private sector employer and our biggest inward investor. That continues to be a very substantial endorsement of Northern Ireland as an aerospace manufacturing centre of excellence.

It should be remembered that the company’s Northern Ireland operation, Bombardier Shorts, has faced setbacks in the past. The most serious was the loss of 1,500 jobs with the collapse of Fokker. It reinvented itself and emerged from the turmoil to become more competitive and to achieve even greater success. New products were identified and orders secured to replace the Fokker business. It met a massive challenge then, and prospered. Over the past year, for example, the company recruited 1,500 people as part of a £50 million growth plan across all its factories. I am confident, therefore, that Bombardier Shorts will overcome this current setback and will continue to play a pivotal role in the Northern Ireland economy for many years to come.

Members will be aware that I contacted the Prime Minister immediately after being briefed by Bombardier Shorts management about the company’s plans and their likely impact on local communities in Belfast, Newtownabbey, Dunmurry and Newtownards and on their many suppliers across Northern Ireland. I expressed my concern to the Prime Minister and to the Secretary of State for Trade and Industry, Patricia Hewitt, about the situation facing Northern Ireland, and I pressed for a meaningful UK-wide response. I emphasised that the loss of over 2,000 jobs to the Northern Ireland economy would be the equivalent of a loss of up to 70,000 jobs in Great Britain.

I urged the Government, working in conjunction with other national leaders, to ensure that interventions currently being considered for the airline industry be extended to the aerospace industry. Political input will be necessary if an appropriate response is to be developed and delivered. To improve cash flow, I have suggested the deferment of the payments of launch-aid assistance by the aerospace industry next year. I have also pressed the Government to assist with "soft" financing to help airlines purchase aircraft and kick-start demand. I believe that those measures would help to ease the pressures on the company, and I await a response from the Government.

Members will know that a number of UK airlines and aerospace companies are also experiencing acute difficulties as a result of the global economic downturn, as is shown by the very regrettable decision by British Airways — one of the best known names in aviation — to withdraw from the London Heathrow-to-Belfast route. The Department for Regional Development is making forceful representations to the company and the Government on a decision that will impact adversely on perceptions of Northern Ireland, particularly in North America.

It is still too early to assess the full impact on Northern Ireland of the Bombardier Aerospace announcement and how its employees and the local communities in Belfast, Dunmurry, Newtownards and Newtownabbey will be affected. However, the company has indicated that the job cuts will be spread across all its plants. The IDB is maintaining close contact with the company and will develop a programme, with the Department for Employment and Learning, to assist those who will lose their jobs. I have agreed with my Executive Colleagues, Dr Seán Farren, the Minister for Employment and Learning, and Maurice Morrow, the Minister for Social Development, to develop a co-ordinated interdepartmental approach.

Overall, the company spends in excess of £40 million annually with suppliers in Northern Ireland and in the Republic. Our aim will be to devise a safety net for those facing redundancy, helping them to explore alternative employment and/or reskilling opportunities.

My Department and its agencies, in particular the IDB and LEDU, together with the Training and Employment Agency, are examining the steps that they may be able to take, in conjunction with the Northern Ireland Aerospace Consortium, to assist and safeguard employment in the many smaller companies in this important sector.

Aerospace has been one of our most dynamic, technology-led and export-focused industrial sectors. Upwards of 2,000 people are employed in aerospace companies other than Bombardier Shorts. Many of those firms have also widened their business to supply other aerospace companies such as Airbus, BAE Systems, TRW Lucas and Astrium. I draw encouragement, therefore, from the visit to Northern Ireland last week of senior managers from Airbus and other European aerospace companies. That is part of an ongoing programme of contacts that will, in time, lead to worthwhile business.

Clearly, the local aerospace industry has now developed a solid base and is particularly well-placed to achieve accelerated growth over the longer term. However, having endured the pain and adverse economic consequences of local terrorism for more than 30 years, it was a real blow to sustain such direct damage from global terrorism, all the more so since it comes at a time when we have been striving to build a platform that will provide political, social and economic stability.

The economy is still fundamentally strong. It has, after all, survived 30 years of upheaval and tragedy. We will face a tough year. It will be difficult to maintain the levels of inward investment achieved in recent years, and we will have to review our overall strategy to take account of the current problems. However, we have experienced and surmounted severe difficulties in the past.

Looking at the wider economy, we can draw confidence from the significant improvements in productivity, employment and exports over the past decade. Northern Ireland is now better placed to meet the current, very challenging, economic situation. Increasing productivity has been a feature of recent economic performance. The statistics indicate a consistent and strong growth in overall competitiveness. However, we are currently in uncharted waters. This will be an extremely difficult year.

The statistics show that the local economy is now more resilient and adaptable than ever before. Northern Ireland’s high rate of business survival after 36 months — 76·2%, compared with the UK average of 61% — owes much to the support that LEDU provides. Additionally, LEDU will assist some of those facing redundancy to consider starting their own enterprises.

We must continue to focus resources on the entrepreneurship, innovation and creativity that will enable Northern Ireland to come through the global upheaval with as little damage to the fundamentals of the local economy as possible. The reshaping of IDB, LEDU and the Industrial Research and Technology Unit into a single agency, Invest Northern Ireland, which is currently underway, will provide a much sharper focus, increase flexibility, and strengthen Northern Ireland’s competitive edge in the target technology-led sectors that will drive the global economy forward.

I assure those people most directly affected that the Department of Enterprise, Trade and Investment, and all Departments, will do everything possible to help them find alternative employment opportunities. We look to Assembly Members for their continued support for the measures we shall take to protect the local economy.

It is most regrettable that we find ourselves in this situation, but when we hear about challenging terrorism on a worldwide basis, there will have to be a worldwide response in order to protect economies from the inevitable consequences of downturn. I hope that significant attention will shortly be paid by our own Government, the European Union, and the developed world to ensuring that confidence is restored and passengers are encouraged to travel by air once again. In that way, the spiral that we are at risk of entering would be checked and reversed.

Séan Neeson (Alliance, East Antrim)

I agree with the Minister that we should not join the band of the prophets of doom. However, by the same token, there is no room for complacency in the difficult days that lie ahead. I agree that there is a need for an interdepartmental approach to the issue. Since they took office, the Minister and Dr Farren have worked very closely together on the issue. The Committee for Enterprise, Trade and Investment will address the issue when it meets this Wednesday. Does the Minister agree that there is a need for the Assembly to work collectively to face the challenge that lies ahead, and that we now need to ensure that we build on the strength of our indigenous industries.

Reg Empey (UUP, Belfast East)

I said that there would be an interdepartmental response, and there will be.

I was hoping that by providing Members with an opportunity to discuss these problems at an early stage we would get a collective response. We must understand that Northern Ireland — as a small regional economy — is limited in what it can do. However, we are not powerless.

The lack of demand for aircraft has been precipitated by an act of terrorism and there has been a dramatic drop- off in the number of people using aircraft. To encourage people back will require responses from Governments and from national leaders — it will require a collective international effort. The Government in London have a role to play, and that is why I approached the Prime Minister as soon as the news had broken.

As the Deputy Chairperson knows, small businesses are the backbone of Northern Ireland’s economy and it is inevitable that concentration on that sector is vital. As far as the immediate issue is concerned, some measures can be taken to help companies such as Bombardier Shorts. Those measures will ease cash flow and, more importantly, stimulate demand for their products. Although demand for products has been strong and orders have not been cancelled, people are not in a position to take delivery of them — and that is the problem. That is the unique nature of this situation, and it not only applies to Bombardier Shorts but to other companies in Northern Ireland.

The problem is not the cancellation of orders; it is that companies have suddenly been confronted by a huge drop in cash flow and have not had time to plan for the consequences. There must be a twin-track approach and one of the key issues must be the stimulation of demand, which can only happen when people are prepared to return to using aircraft.

Jim Wilson (UUP, South Antrim)

I thank the Minister for bringing his concerns to the House. Northern Ireland has been told to expect approximately 2,500 job losses as a result of the terrorist attacks on 11 September. Belfast International Airport is a major casualty, with British Airways’s decision to withdraw from the Heathrow route followed by Aer Lingus’s announcement on Friday.

Does the Minister agree that many of the decisions taken in corporate boardrooms are being based on little more than panic caused by worldwide speculation that we are heading for war and a global recession? Does he agree that the announcements are attempts to engage in hasty housekeeping to pre-empt an economic downturn?

Reg Empey (UUP, Belfast East)

I am aware of the concerns that Mr Wilson and other Members have about the situation at Belfast International Airport. There are two things coming into play. Many people believe that part of the reason for the decisions that are being made does not stem from 11 September, but, in fact, is more deep-seated and goes back further. There may be an element of truth in that. However, irrespective of the reason, we are confronted with two difficult decisions.

While the number of routes from Northern Ireland to London has increased in the past couple of years, it is nevertheless significant that a national carrier has suddenly chosen not to use that route. It is significant because of the international connections that one can get through a major international airline. I am sure that the Member is aware that there has been speculation over the Heathrow- to-Belfast route for a number of years, and that recent events and changes of policy by some airlines using the airport have probably precipitated the decisions.

The situation is less clear with regard to the Aer Lingus decision, as that company is having to reshape its entire operation because of the economic effect of the huge drop in the number of people flying the north Atlantic, Aer Lingus’s most profitable route. Any trading company has legal responsibilities, and I have pointed out to the Irish authorities the impact of that decision. Mr Mallon and I will be writing to British Airways and to Aer Lingus in this regard.

Eddie McGrady (Social Democratic and Labour Party, South Down)

I thank the Minister for bringing this serious economic downtown to the attention of the Assembly so promptly. I also commend him for his initiative in asking the Exchequer for additional funding and for the proposed interdepartmental grouping which will assist the industries and individuals affected.

Will the Minister agree that job loss and lack of income will affect many communities throughout the North, other than those he has mentioned? In particular, will he address the plight of B/E Aerospace; a manufacturer of aircraft furnishings in Kilkeel, whose workload has plummeted as a consequence of the problems of the airline industry? The decline in employment in that company is as significant to the rural community of Kilkeel as that of Bombardier Shorts is to Belfast. I seek the Minister’s assurance that the financial, retraining and administrative assistance that he has outlined for Bombardier will also apply to B/E Aerospace as a matter of urgency.

Reg Empey (UUP, Belfast East)

I am acutely aware of the situation at the Kilkeel factory and have already met with its senior executives. IDB officials have already met with the company, and we are in discussion with them. The company is liaising with its parent company in Connecticut; we will keep in close contact to see how we can help. The plant in Kilkeel is a very large employer, relatively and locally, so that anything that happens to that company will have a major impact on the local community. I have no doubt that should the need arise, my Colleague Dr Farren and my Department will supply the same help to that company as we would to Bombardier Shorts.

Peter Robinson (DUP, Belfast East)

I thank the Minister for taking the first opportunity he could to make a statement on the issue and for the early briefing he provided to me on matters relating to Bombardier Shorts.

The Minister said in his statement that this situation arises out of an international problem — it is a global trend. We would be deceiving ourselves in thinking that our regional Assembly can have any major impact on future job losses in this area. Everything will depend on confidence in the airline industry. Many of Bombardier Shorts’ problems do not result from cancelled orders, but from deferred deliveries because the financial sector has not got the bottle to put its money forward. The key to averting further job losses at Bombardier Shorts is therefore for the Minister and his Colleagues to convince Her Majesty’s Government to advance financial guarantees for a limited period, until the financial world is prepared to take up the packages and resources that would be the norm.

Reg Empey (UUP, Belfast East)

The Member is correct in saying that this is a global issue and that Governments must put forward ideas to assist firms and to create the correct international circumstances in which the aerospace industry can recover. I have been attempting to do that. Although we have a small regional economy, we can still put forward ideas. We are presenting to the Government ideas that are designed to assist the cash flow problems of the companies that are affected here and to deal with confidence and international demand. Not only can those matters be directly affected by financial institutions, they must be led by Governments. That will have to be done internationally, with the involvement of the European Union, the United States of America and our own Government.

There are several areas in which Governments can assist to protect the cash flow of companies that are directly affected. It would be supremely ironic if, given the campaign that has been launched against terrorism, terrorists were to succeed in destroying the economic infrastructure of many of the countries that are ostensibly waging war against them.

Our duty is to do what we can not only to alleviate the short-term problems of the individual who is affected by the loss of his or her job but to put forward ideas to help to reconstruct demand for our products.

Dara O'Hagan (Sinn Féin, Upper Bann)

Go raibh maith agat, a Cheann Comhairle. We all share the Minister’s concern about the economic downturn, and he warned us of a strong likelihood of further bleak economic news. Although the problem of job losses will be a priority, will the Minister ensure that jobs are spread throughout the North of Ireland, and that the active targeting of areas of social need will not stop in these bad economic times?

Reg Empey (UUP, Belfast East)

The Member will be aware that the effect of significant job losses is not confined to the communities near a plant, and Mr McGrady made that point. There are four Bombardier Shorts plants in Northern Ireland, but the employees at each plant come from a broad surrounding area. Our economic objectives are to ensure that as much economic activity as possible is generated in New TSN areas. My Department is committed to meeting its targets for New TSN, and it did so in the last financial year. However, we are in uncharted waters. We cannot instruct companies where to go. We can guide and encourage them and we can improve the skills of those who live in particular areas, but there are limitations. I assure the Member that my Department has not lost sight of those points. Where large numbers of people are losing jobs and revenue, no matter what part of Northern Ireland they live in, it will have a negative impact on everybody.

David Ervine (PUP, Belfast East)

I welcome the Minister’s statement. What type of support programmes will be made available to those affected by the economic crisis? Will he encourage his Department to assist workers by ensuring that at least as much money is spent on them as is spent on assisting companies, thus lessening the strain that economic downturn puts on the pockets of workers?

Finally, will he, conscious that the economic downturn was predicted before 11 September, encourage his Department to be a watchdog in case some businesses see America’s problem as a business opportunity?

John (Speaker, Belfast East)

Before I call on the Minister to respond, I draw the House’s attention to the fact that I have received notice that the Minister for Employment and Learning will be making a statement after the questions on this statement, and that statement may deal with some of the matters that the Member has raised.

Reg Empey (UUP, Belfast East)

I am grateful, Mr Speaker — I was about to say that Dr Farren will be addressing those issues. However, I will respond to Mr Ervine’s point about being conscious of the downturn before 11 September. We were all acutely aware that there was an undoubted downturn. However, we must ensure that applications from companies are judged on their economic merits and we will continue to do that.

On the issue of money that is spent on companies, nobody is naïve enough to believe that simply providing cash for a company is, in itself, a solution. The problem arose from an almost instantaneous lack of demand. As another Member for East Belfast, Mr P Robinson, pointed out, a deferment created the present crisis. That will not necessarily be the case with every company, but we are acutely aware that some people may take opportunities to do things that they would not normally get away with.

Jane Morrice (NIWC, North Down)

It is important to have economic leadership, and that has been shown this morning. In his statement, the Minister said that it will be difficult to maintain past levels of inward investment. That could be an important turning point for Northern Ireland. Does the Minister agree that it is more important to increase self-sufficiency in Northern Ireland’s industrial base and local industry? There are three matters that must be addressed: first, the desperate need to make Northern Ireland self-sufficient in renewable energies such as wind; secondly, the need to promote industries such as textiles, ship building and food processing that Northern Ireland is good at and has a reputation for; and thirdly the need to support more local entrepreneurship. Does the Minister agree?

Reg Empey (UUP, Belfast East)

It was clear before 11 September that this financial year was going to be more difficult for inward investment than the last financial year. It can be seen from the deal flow that inward investment to the entire European Union and to the United Kingdom as a whole has dropped. Inevitably, inward investment to Northern Ireland will follow a similar pattern. That does not mean that we give up. We still need direct foreign investment because that broadens the base of our economy and we get skills, expertise and access to markets that we would not otherwise achieve. However, we must stimulate and assist local indigenous business as much as possible. I have often made it clear that we follow those twin tracks at all times.

The Member mentioned other issues that affect the economy — energy, the traditional sectors and support to local businesses. She is aware that we have been very active on the energy front and that there is much to do this year. I am acutely aware of the necessity to ensure that energy is competitively priced and that the supply is secure. On the latter point, the security of supply is rapidly improving. By the end of this year or the beginning of next, the supply will be even more secure with the opening of the Scottish interconnector.

As far as our own industries are concerned, we encourage the traditional sectors to become more competitive. The Member is well aware that the Kurt Salmon report on textiles has been implemented. As a result, there have recently been some positive announcements.

We continue to support local businesses because a decline in inward investment often means a decline in local investment. We can continue to improve the economic infrastructure; recent decisions on gas and roads are examples of that.

All these problems must be dealt with across the board.

John Taylor (UUP, Strangford)

The Minister will recall meeting my Colleague Tom Hamilton and me to discuss the problems of the Bombardier Shorts plant in Newtownards, as well as the overall employment situation in the borough of Ards.

Will the Minister confirm that he will do everything to facilitate further employment in the Ards borough area? Will he take note that we appreciate very much the support of Bombardier Shorts for Northern Ireland, not only in Newtownards but also in Belfast and in Castlereagh? It has provided thousands of jobs for people from our constituency.

It is regrettable that we have lost both British Airways and Aer Lingus. Does the Minister recall that not too long ago there were flights from Belfast only to Gatwick and Heathrow airports? Now we have flights to five London airports. There have been some advances. Other airlines now fly from Belfast International Airport to other London airports.

Can the Minister state whether there will be future problems for employment in industries connected with the aircraft industry in Northern Ireland?

Reg Empey (UUP, Belfast East)

The Member will be aware that I have played what part I could to assist the borough of Ards in its difficulties, starting with the textile sector. A group set up with the local authority and my Department’s agencies worked well and achieved considerable success. Several investments in the area have reversed the trend of recent years. However, there is no disguising the fact that one of those successes was increased employment in that area by Bombardier Shorts. Sadly, that gain could be temporarily lost.

There is now more choice of flights to London from Northern Ireland than there was a couple of years ago. Nevertheless, the loss of a national carrier, with its international connections, is very significant. We must acknowledge that that may not necessarily have been brought about by the events of 11 September but might have been in the pipeline for some time.

We have encouraged and have tried to grow clusters in several areas. The aerospace sector is one that we have been happy to see grow. A consortium of aerospace companies has been formed in Northern Ireland; it has been very successful, going to air shows, attracting business and being aggressive in the marketplace. It has provided an increasing number of high-skill jobs. Approximately 2,000 people are employed in downstream companies, and we will see to what extent they will be affected.

Some of them have broadened their customer base and are not exclusively confined to one company such as Bombardier Shorts. Some of them have opened contacts in mainland Europe and are supplying manufacturers in other areas. Therefore the issue must be approached company by company; there is no single answer. However, I assure the Member that we are acutely aware of the issue, and we will contact the companies that seek assistance.

Robert McCartney (UKUP, North Down)

Although the Minister’s prompt response is welcomed, the doleful contents of the statement are hardly an occasion for joy. In reply to the leader of the Alliance Party, the Minister said that although Northern Ireland is limited because it is a small regional economy, it is not entirely powerless.

Rather than giving us ideas — perhaps more properly described as suggestions — will the Minister tell us what he, the Assembly and the Executive can do? We should bear in mind that the beef and pig industries were not saved by the Assembly; the textile industry has been decimated; and heavy engineering, which Ms Morrice suggested should be resuscitated, is really on a temporary life-support system. Will the Minister please tell us, in concrete and definitive terms, what the Assembly is empowered to do? Members know that most of the effects of this downturn are outside the power of the Assembly; indeed, many of them are outside the power of central Government. It was suggested that the Minister should visit the Prime Minister. The Prime Minister was unable to avert massive redundancies in his own constituency; what will he do for Northern Ireland?

Reg Empey (UUP, Belfast East)

One must strike a balance between saying "woe is me" and "it is someone else’s problem — we can do nothing about it". Northern Ireland is a small regional economy. Due to globalisation and the fact that the corporations that we are dealing with operate on an intercontinental basis, what one can do is inevitably limited. There are several issues. For example, if the fallout of globalisation is the rationalisation of production units, a competition inevitably ensues between regions or countries over where the units will be based. We can have a direct influence on that.

There has been an international downturn in textiles. If the Assembly does nothing, that decline will accelerate. However, we have done something. We have a blueprint and we are working towards it. In the last few weeks, the Department of Enterprise, Trade and Investment has supported various amalgamations that will result in stronger production units. They will have the competitive edge to survive, albeit on a smaller scale.

In the heavy engineering sector, one or two companies would undoubtedly be closed today had it not been for our institutions. That does not mean that the problem is solved, or that they will survive. Nevertheless, if they are open, there is a chance to improve them and to give them breathing space to compete.

There are indeed limits to what the Prime Minister can do. However, everybody plays a part. When a company operates in a particular region, it is influenced by the attitude of the people in that region. Companies are influenced by the attitude of the regional government and by what it offers. To put it bluntly, it is often an auction. We may not like that, but it is true.

We must decide, as a community, whether we shall be included and whether we shall be able to judge what is in our best interests with regard to the disbursement of public funds. It is better that we have that opportunity. If we had had no meaningful representation, and if we had left it to others to make the decisions for us, there would be many more empty holes in the ground than there are at present.

Annie Courtney (Social Democratic and Labour Party, Foyle)

I thank the Minister for his statement and I regret the circumstances in which he has had to make it. As the Minister is aware, the north-west is trying to overcome job losses in the textile industry. Maydown Precision Engineering Ltd, formerly Molins Tobacco Machinery Ltd, is one of the key component suppliers for Bombardier Shorts in Belfast. There is concern that the downturn in business for Bombardier Shorts will have a knock-on effect on that company. Maydown Precision Engineering Ltd has managed to turn itself into a very competitive company over the years, through training and reskilling. Will the Minister assure me that any planned retraining or support will be made available to that company and to others in the north-west?

Reg Empey (UUP, Belfast East)

I am acutely aware that Maydown Precision Engineering Ltd is one of those downstream companies. That company found itself with no market, but it took the skills and the equipment that it possessed and reinvented itself. It acquired and achieved skill levels that had hitherto been absent in that area. There was no tradition of those skills in that area. I have visited the plant and seen the amount of effort that is put into what they do and the positive change that has taken place.

The situation that Molins Tobacco Machinery Ltd faced several years ago is similar to the present one. In such circumstances, local effort can result in long-term sustainability in an alternative market. However, the same criteria will apply to any company in the north-west that is affected as are applied to companies elsewhere. My Colleague Dr Farren will shortly make that clear. There would be no difference in approach, although there may be a difference in scale. We must look at each case on its merits in order to see what steps should be taken. It is too early to tell what the downstream effects will be because we do not know how long the deferments and deliveries will take.

There may be other angles to consider. The type of aircraft that is in demand may change. There could be an increase in demand for corporate jet aircraft, rather than for the airliners that Bombardier Shorts make, as companies may feel more comfortable if their executives fly under their own control. The demand for the smaller regional airliner that Bombardier Shorts specialises in might be less damaged in the long term than that for the large intercontinental airliners. We do not yet know what the full effect of the crisis will be. Therefore, it is premature to write off any of the downstream suppliers. Both the skill base and the area in which those companies specialise are fundamentally sound. The issue is long- term survival.

Jim Wells (DUP, South Down)

The Minister will not be surprised that I wish to raise the issue of B/E Aerospace in Kilkeel. As he is aware, I led a deputation of four vice-presidents from that company to meet the Minister on Friday evening. They emerged from the meeting heartened and encouraged by the positive response from IDB officials and yourself. Does the Minister accept that that company in Kilkeel is more exposed than others to any downturn in the domestic airline market in the United States? More than half of the company’s production is for companies such as Northwest Airlines and American Airlines, both of which were directly affected by the terrible events of 11 September 2001. Does he accept that the loss of 320 jobs in Kilkeel would be a disaster for the town, and that it would be even more significant than the terrible loss of several thousand jobs in Belfast?

Can he assure me that his officials will do everything in their power to support the suggested package, which may save Kilkeel from such an outcome? Will he also ensure that, if money for the aerospace industry is forthcoming from the Prime Minister, B/E Aerospace will receive funding from that package? The company is in a very difficult position.

Reg Empey (UUP, Belfast East)

I am acutely aware of the significance of B/E Aerospace to the community that Mr Wells represents. There is no doubt that the 320 jobs provided by the company in Kilkeel make a huge contribution to the local economy. I had a meeting with the company on Friday evening and they are seized of the urgency of the situation. There have been large-scale deferments on its order book — on a similar scale to Bombardier Shorts’s.

The Member will understand that I cannot go into the details of the meeting, but I can assure him that no effort will be spared should my Department be invited to assist in any corporate reorganisation that the company might propose. I assure him that we will make any response within a short space of time; my officials have already been instructed accordingly. We will make every effort to do what we can, because a lack of action could have tremendous consequences for the company.

Fundamentally, B/E Aerospace is an excellent company. It makes an excellent world-class product and, for a long time, it has followed the advice of Government agencies. It has moved upmarket and upgraded its skills; it is export-orientated and has achieved a worldwide reputation. All the fundamentals of the business are in place.

Some cynics might say that we are only minnows, that there is nothing that we can do, or that the Prime Minister cannot do certain things. However, the Lord helps those who help themselves. We can, and should, do something. Mr Wells has focused on one thing that we can do, and I assure him that should an opportunity arise to resolve the difficulties of the company, we will do everything possible.

John Kelly (Sinn Féin, Mid Ulster)

Go raibh maith agat, a Cheann Comhairle. I thank the Minister for his comprehensive statement of concern in regard to the bleak economic outlook. He was correct to point out that the downturn existed before the tragic events of 11 September 2001 — those events accelerated and increased the downturn.

The Minister was right to chide John Taylor for his snide remarks about Aer Lingus — they were unfortunate and unwelcome in the circumstances. Will the Minister take the opportunity to encourage Belfast International Airport to take up the offer by Michael O’Leary of Ryanair to provide a service from the airport? In addition, what influence can he bring to bear to ensure that, despite our dismal economic future, the 1,000 jobs at the industrial centre on the Crumlin Road will be protected?

Reg Empey (UUP, Belfast East)

With regard to the latter point, Mr Mallon and I visited north Belfast this morning and will be having discussions with public representatives of the area later today. We are acutely aware of the severe damage that could be inflicted if the development of that complex were inhibited. We are dealing with that matter and I hope that we will have an opportunity to address many issues affecting that area.

There is a downturn, but it has not been a collapse hitherto. However, with this other matter coming on top of it, international markets and finance have a big role to play. Peter Robinson made a comment about financiers earlier. There is a lot of suspicion, and if people were following the stock market, they would have seen a very significant fall in prices the day before the incident took place. There appears to be growing evidence that some people connected with, or informed by, people close to those who carried out this attack may very well have profited as a consequence. That is the sum indication of the scale and forces with which we are confronted: a mixture of natural downturn and the specific incidents that occurred on 11 September. I can assure the Member that we are very aware of that.

Regarding the international airport, it is entirely a matter for the airport to decide which airlines it negotiates with and attracts. The Department for Regional Development is responsible for airports. Naturally, from my Department’s point of view and that of the tourist, the greater the choice, and the greater the ease of getting into and out of Northern Ireland, the better. We have already referred to the fact that you can now get to more airports in London than previously — the more the merrier. More access and competition helps consumers. However, I am in no position to suggest to the international airport how it should conduct its commercial negotiations.

George Savage (UUP, Upper Bann)

I concur with what most Members have said. This is the second major industry in Northern Ireland to be hit by a crisis not of its own making. I want to know what we, as an elected body, can do to help alleviate the problems. I know there is no short-term solution to this. However, what can we do to help in the long term?

Reg Empey (UUP, Belfast East)

There are a number of things. First, we can show that we are a region that understands international business and its needs and problems, and a region that can respond to and help its investors in the bad times as well as the good. There is no point in rolling out the red carpet for investors when things are going well if you are prepared to ignore them when things are difficult. This has to be done in a sensible way.

We also have the ability to influence policy decisions in London and Brussels. The Member referred to the difficulties that the agriculture industry has faced, again, through no fault of its own. Northern Ireland has fought back from a very difficult position in agriculture. We have dealt very effectively with foot-and-mouth disease so far, and I pay tribute to my Colleague, Bríd Rodgers, for that. It is a fact that we took a much more aggressive approach than our Government in London did. That is one of the reasons we have been able to suppress the worst effects of foot-and-mouth disease on our community so far. Similarly, other diseases have arisen through no fault of our own.

The Assembly can show that as a region we understand business; that we understand its problems and its advantages and are prepared to respond to them. We need to make suggestions to both our Government and the European Union. Often it is how individual policies are dealt with in the minutiae, in the small print, on a case-by-case basis, that defines our ability to come through difficulty as strongly as one could possibly hope to.

Joe Byrne (Social Democratic and Labour Party, West Tyrone)

I commend the Minister for his statement, and I pay tribute to Bombardier Shorts for the employment that it has provided for many years. However, we must appreciate the strategic significance of Aldergrove as an international airport. Will the Minister consider meeting the management of the airport, along with the Minister for Regional Development and the Minister of Finance and Personnel, to discuss how to guarantee it a viable future?

Reg Empey (UUP, Belfast East)

I cannot respond to that suggestion without consulting my colleagues. Belfast International Airport is part of a conglomerate that is involved in a takeover battle, in which significant commercial issues are at stake. It would not be Government policy to subsidise such an organisation. However, there are policy objectives that we wish to achieve, and I am prepared to consult my ministerial Colleagues in that regard.

Iris Robinson (DUP, Strangford)

Despite the fact that Northern Ireland has a workforce with many specialised skills, east Belfast and my constituency of Strangford, in particular, have sustained heavy job losses in shipbuilding, textiles, farming, fishing and, now, the aerospace industry.

The Minister rightly said that we should not join the chorus of doom and gloom. However, the employees and their families face an uncertain and gloomy future. Can the Minister be specific about the number of jobs — including those of subcontractors and suppliers — that will be lost due to the knock-on effect of the axing of the 2,200 jobs at Bombardier Shorts?

Reg Empey (UUP, Belfast East)

The Member is correct to say that there have been a series of setbacks in that area over the past two years. Nonetheless, we have had some impact on the effects on the heavy engineering and textiles industries, and recovery is beginning to show.

The company has now given notice to 1,500 or 1,600 people. I do not know precisely where those jobs are, but the employees will be aware of the company’s intentions. Sadly, when the news broke at the end of last week, all the families were under the sword of Damocles. Nobody knew which families would be affected. One can envisage the situation in those homes: people did not know whether they would be able to buy their children what they would like for Christmas, or whether they would have a job in the new year. The company has now identified the individuals affected and has embarked on a consultation process with the trade unions. I plan to meet the trade unions — tomorrow, I think — for a general discussion.

In addition to the 1,500 identified staff at Bombardier Shorts, approximately 300 subcontractors ceased operations on 21 September. There are also individuals on short- term contracts and other subcontractors, and that will bring the total to approximately 500 non-core employees directly affected by the decisions taken by Bombardier Aerospace. Other companies also have difficulties. I am not at liberty to identify them now; it is too early.

Bombardier Shorts feeds out much of its work to subcontractors. It is not yet clear whether it will repatriate some of that work to itself or whether it will go on reduced work programmes. We also must bear in mind that some companies in the aerospace industry have accumulated work from other sources and may therefore be able to switch within their own order books. That will be very much on a case-by-case basis.

We now have approximately 1,500 identified individuals who will be entering the consultation processes. They are core Bombardier Shorts workers. In addition, there are approximately 500 people who are either on short-term contracts or are subcontractors working for Shorts, some of whom have already had their contracts terminated. Around 300 of those 500 had their contracts terminated on 21 September. That is the most accurate information that I can give the Member at this stage.

Danny Kennedy (UUP, Newry and Armagh)

I welcome the Minister’s strong commitment to the local economy and to those affected by the current crisis. On a more general issue, will the Minister undertake to reinforce the message to Her Majesty’s Government, and the Prime Minister in particular, that international terrorism — be it Islamic or Irish — is not acceptable, and that that also includes groups of so-called freedom fighters? Will he also take the opportunity to condemn outright the anti-American rhetoric espoused by members of Sinn Féin and its mouthpieces?

Reg Empey (UUP, Belfast East)

I told the Member that I had last week written to the Prime Minister. I did so because of the recognition that this issue was on a scale that could not be confined to a local level. The Prime Minister and other world leaders are undertaking a campaign against terrorism, and measures have been taken in London designed to attack the financial base of some terrorist organisations. It would be hollow to do that and yet allow some of our key strategic industries to be destroyed by terrorism. That could happen if adequate demand is not quickly re-established. I am acutely aware of the necessity to re-establish demand.

I can assure the Member that I will be in touch with the Prime Minister’s office over the next few days. I will also be in touch with the Secretary of State for Trade and Industry, who has a specific role in the provision of launch aid for aerospace projects and in encouraging the development of "soft" finance schemes to enable the airlines to buy products at reduced rates of interest. The creation of demand is the key.

On the second point, we are getting into false definitions. There is no difference, in my view, between what happened to the World Trade Centre and what happened at Canary Wharf, for example, except in scale. There is no practical difference. People are talking about their freedom; this action is reducing the freedom of people to earn a living for their families. It is reducing the freedom of a community to live in peace and to prosper. Some of the mental and political contortions that people were able to do at the weekend were, therefore, perhaps nothing short of a condition needing the professional services that a person such as you could provide, Mr Speaker.

Alasdair McDonnell (Social Democratic and Labour Party, Belfast South)

I compliment the Minister on his statement. It is reassuring to know that we are, as far as is possible, on top of the situation. That is vitally important.

Part of my question, about the interest, management or political overlordship of the airports, has been asked by my Colleague, Joe Byrne. I am concerned about air traffic. While Short Bros plc and various other industries are being affected, it is tragic for those directly involved. The problem with the shutdown of airports or air connections is that everyone is affected, and our ability to generate alternative jobs is further restricted due to the lack of air access. While this may not be acute in the short term, in the long term it is much more damaging.

What process, if any, is in place to influence the loss of air connections from Belfast International Airport? Mr Byrne made a suggestion about a tripartite approach. Can the Minister detail his communications with British Airways and Aer Lingus? I am particularly concerned about the innovative transatlantic service of Aer Lingus. I am also concerned about British Airways, although we have other alternative routes to London that will pick up any spare capacity.

I am deeply concerned about the only transatlantic route we had. I am aware that when the Minister was a Belfast city councillor, the Aer Lingus connection was vital to American industrialists investing in Northern Ireland. Is there any possibly, through the North/South economic bodies or the Irish Government, of persuading Aer Lingus to hold on to that service for one or two days a week?

Reg Empey (UUP, Belfast East)

I am acutely aware of issues of air connection and access. As a region on the western edge of Europe, there are peripheral access difficulties. Economic factors are also at play. While airports are primarily a matter for the Department for Regional Development, I have a broad interest in their operation, particularly where tourism is concerned. I have received representations from Assembly Members about those airlines. The local Member of Parliament is involved, and meetings have been held. We have communicated with Belfast International Airport, and we are very concerned.

The transatlantic aspect is a unique feature of the Aer Lingus service, although the ability to use a British Airways service, and to book across the world, is another major consideration. On Friday afternoon, I expressed my concerns about the loss of the service to Mrs O’Rourke, the Minister in Dublin, and asked if that decision had been ratified. My understanding is that an assessment is being made of all the airline’s routes. Aer Lingus is dependent on the profitability of the transatlantic routes, and the significant reduction in traffic is having huge cash flow implications. Each airline has to protect its future. I hope to have further discussions, and I was promised that the Minister would reply to me this week when matters become clearer.

The problem with British Airways is more profound. The Member will be aware that some have been expecting this decision.

John (Speaker, Belfast East)

The Minister’s time is up.

Bombardier Aerospace Short Bros plc

Sean Farren (Social Democratic and Labour Party, North Antrim)

This statement is intended to complement the remarks that have been made by my Colleague, the Minister of Enterprise, Trade and Investment, who has outlined the severity of the announcement made by Bombardier Aerospace last week. The actual job losses are a cruel blow to the aerospace industry in Northern Ireland and to our local economy.

I look forward to the day – and I hope it will not be too far distant – when the aerospace industry will recover from its present problems and Bombardier Aerospace, no longer threatened by the present uncertainties, will continue creating the wealth and employment opportunities that have been a central feature of its contribution to the Northern Ireland economy.

Sir Reg Empey has demonstrated his commitment and resolve in tackling the issues facing the local economy as a result of the global instabilities. I assure the House that that resolve is shared by me, my Department and the entire Executive. I hope that our collective approach on this matter will send a very clear message that the devolved Government in Northern Ireland are committed to addressing such difficulties in a responsible, flexible and shared way. That is the cornerstone of good government, and I assure Members that the Executive are acting as one body on this important issue.

It is appropriate that we are united in our aim of assisting the company in every way open to us during this difficult period. We should be mindful of the impact of the redundancies on the lives of those people whose jobs are directly involved. For that reason, my Department has been proactively engaged with Shorts’s management to ensure that we give full and comprehensive support to those who are losing their jobs.

For a number of years, Shorts has participated successfully in my Department’s Bridge to Employment programme. The programme helps the long-term unemployed to undertake pre-employment training in ways tailored to the needs of particular employers. Through the programme, Bombardier Shorts has supported the recruitment and training of 500 people who were previously unemployed. This is an impressive figure, which demonstrates the contribution the company has made to our economy.

I am particularly concerned about the future of the 36 Bridge to Employment trainees who are currently with the company. I will be doing everything possible to help those trainees complete their training and find employment. I am particularly grateful to the Engineering Training Council for its expertise and knowledgeable support in this matter. It is hoped that any trainees facing redundancy can be relocated with other employers.

To help support those people being made redundant, Shorts has set aside space in Interpoint for the establishment of a temporary jobcentre. However, the entire Jobcentre network will ensure that a service is available to all affected employees no matter where they live. The Training and Employment Agency (T&EA) is working with Shorts to ensure that a full range of advisory and support services are available to all who will be losing their jobs.

I recognise that financial issues will be a major concern for all workers affected. I am therefore very pleased that the strong partnership that has been developing in recent years between the T&EA and the Social Security Agency (SSA) is very much in evidence, and I am grateful to the Department for Social Development and its Minister for the support of his staff. SSA staff who are qualified to advise people on benefit entitlements will be working alongside people who can advise on alternative employment and training opportunities. There will also be advice on redundancy payment issues and — for those who may be interested — support and advice from LEDU on self-employment and business start-up issues. I am grateful to Sir Reg Empey for his Department’s involvement and support.

As details emerge on the precise numbers, phasing and geographical location of the redundancies, my Department will take the lead in ensuring that the services that I have described are available to all.

As Members may be aware, my Department is experienced in accommodating the needs and anxieties of people who have been either made redundant or who are threatened with that prospect. Most notably, a similar situation arose in Harland and Wolff last year, and we were able to provide a suitable response at that time similar to that which I have described above. We learned from that experience and we will ensure that all support that can be provided to Bombardier Shorts will be made available.

In conclusion, I assure Members, and all workers in Bombardier Shorts, whose future at this moment appears bleak, that I will be doing everything in my power to support and help those who are losing their employment. I am sure that Members will share my hopes that the present problems in the aerospace industry will be temporary and that it will not be too long before we see the re-emergence of Shorts, and of the many other companies associated with the aerospace industry, as strong, profitable enterprises creating good quality jobs for our people.

The Executive’s response to the immediate needs of those being made redundant is a clear example — albeit in circumstances that we could do without — of joined- up Government working in the best interests of all our citizens.

Esmond Birnie (UUP, Belfast South)

The Committee for Employment and Learning shares the concerns of those sadly affected by these large-scale redundancies. As the Minister said, we can only hope that world aviation will rebound as it did after the Gulf War. We wish both Ministers, and all others involved, well in their response.

How successful was the task force that was set up in October 2000 to deal with redundancies at Harland and Wolff, and which is perhaps being seen as a model for the current response? As there is now to be a similar initiative, will anything be done differently on this occasion?

The Minister referred to people receiving training under the Bridge to Employment programme. Will he also attempt to ensure that people on modern apprenticeships with Bombardier Shorts can, as far as possible, complete their training?

Sean Farren (Social Democratic and Labour Party, North Antrim)

Although our research has not yet been concluded on the circumstances of employees at Harland and Wolff, we can show certain trends. For example, 67% of those who were laid off found alternative employment within six months; 9% are classed as economically inactive; and 1% returned to further education and training. It may be a positive indicator for the Bombardier Shorts workforce that less than one in four of those who were laid off at Harland and Wolff were without employment after six months.

The Member will appreciate that surveys are never 100% accurate in tracking everyone affected, so we are unable to paint the full picture. Nonetheless, the trends were positive ones. The general economic circumstances then were more positive than they are now. We may not be in quite such auspicious circumstances today. Nonetheless, the model applied by the Department for Employment and Learning has proven to be successful.

There are over 100 modern apprentices and they will also be given whatever assistance is possible. The Department must contact those who will be made redundant, establish their needs and work from there. The Department will be able to assure all workers — in whatever category — that its advice, information and direction on retraining, or information for those who want to enter self-employment, will be made available.

Annie Courtney (Social Democratic and Labour Party, Foyle)

I regret that Members must talk about redundancies on this scale. What services will the Department for Employment and Learning provide to employees who face such redundancies?

Sean Farren (Social Democratic and Labour Party, North Antrim)

In my statement I attempted to detail many of the more important forms of support that will be available wherever redundancies occur. The Department will provide advice on vacancies and forms of training through local jobcentres. In conjunction with the Department for Social Development we will provide advice on redundancy payments, social security and welfare support.

Mick Murphy (Sinn Féin, South Down)

Go raibh maith agat, a Cheann Comhairle. I welcome the Minister’s statement, but I draw his attention to Kilkeel where there have already been lay-offs in the fishing industry and where the farming community is facing hardship due to the foot-and-mouth disease crisis. A crisis is now looming in the Kilkeel aerospace company, B/E Aerospace, which has trained its staff. What local retraining and job opportunities will be made available by the Department if there are to be job losses? Go raibh maith agat.

Sean Farren (Social Democratic and Labour Party, North Antrim)

It is impossible to be precise about the nature of the retraining because much of what is required has to be identified by those who are being made redundant. The Department is attempting to respond to the needs of each individual. We want to direct those redundant workers who wish to undergo a form of retraining to the training opportunities available in the network of further education colleges and private providers in the training sector.

Training needs must be identified, and staff in jobcentres are expert in doing that. They will be the workers’ first point of contact and will provide the information, guidance and direction based on the individual’s training needs.

Séan Neeson (Alliance, East Antrim)

I commend the Bridge to Employment programme, but in many ways it only deals with the tip of the iceberg. The serious job losses announced by Bombardier Shorts underline that. However, the Department for Employment and Learning has been active and successful in the institutes of further education in providing those courses and training for young people that reflect the needs of enterprise and industry. Will the Minister assure me that that sort of innovation will continue in his Department?

Sean Farren (Social Democratic and Labour Party, North Antrim)

The question highlights the high level of responsiveness that local Departments can make to situations that arise in local enterprises. It was suggested earlier that we can do very little. However, my Department has responded rapidly and flexibly to training needs in tandem with the higher and further education colleges. That demonstrates how we can meet the needs of overseas or indigenous investors. We can therefore inspire local enterprises with the confidence that support is available for decisions on further investment.

In outlining those initiatives, my officials, along with those from the Department of Enterprise, Trade and Investment and from the Department for Social Development, are demonstrating their flexibility, responsiveness, and real and deep concern for the impact on the lives of the workers and their families.

Joan Carson (UUP, Fermanagh and South Tyrone)

The announcement is a dire blow for the Northern Ireland aerospace industry, as are the knock-on effects that it will have on the local economy.

Are Northern Ireland plants more vulnerable because they are engaged only in the manufacturing aspect of the industry, as technological and design developments are carried out in Canada? Will that trend be irreversible if the plants are closed? We risk losing a world-class workforce. How can the Minister retain these skills so that we can benefit from them in future when the industry experiences an upturn?

Sean Farren (Social Democratic and Labour Party, North Antrim)

The Member raises a worry that we all share when we consider the impact on local manufacturing of an international conglomerate such as Bombardier Shorts. The company may question its investment here in the longer term. The challenge is posed: can our Departments meet, in a flexible way, the needs of all the other enterprises in Northern Ireland that form part of multinationals? Can we assure investors that we can provide for their skills needs? We have been doing so with many companies, both those that are indigenous and those that form part of an international conglomerate. We have achieved that in many ways in the past two years, and, in my experience, we have done so to the considerable satisfaction of owners and investors.

We will continue to do that, because that is how we can demonstrate our desire to support investors. We have a capable and highly skilled workforce, and we work hard to ensure that it is as highly skilled as the new enterprises demand. Our efforts receive appreciation and acknowledgement from many sectors of management in the new enterprises, and I trust that that will continue. If it does, it will give confidence to potential investors that this is a place in which to locate their companies, whether local or overseas.

Patricia Lewsley (Social Democratic and Labour Party, Lagan Valley)

The speedy response to this crisis proves the strengths of the devolved institutions and interdepartmental working. I also pay tribute to Bombardier Shorts and to its commitment to its employees. It is to be hoped that after the Fokker crisis Bombardier Shorts will become more competitive and, at the same time, prepare for the orders that have been deferred and that may come back on track later.

The issues are redundancies and the lack of employment. Considering that almost 900 jobs will be lost before Christmas and that more than 400 jobs could be lost by subcontractors of Bombardier Shorts, how will the subcontractors be helped through the crisis?

Sean Farren (Social Democratic and Labour Party, North Antrim)

The response to the subcontractors will be the same as the response we are making to the workers of Bombardier Shorts. Local jobcentres are prepared to provide the sort of advice to workers who have been made redundant that I have described. Sir Reg Empey’s Department may provide other forms of support for contractors, and for industry in general, to alleviate the crises in which they may find themselves in the immediate future.

Responsiveness, flexibility and concern are being expressed across the Government here, and the workers and management appreciate that.

Jim Shannon (DUP, Strangford)

This is a difficult time for everyone, not least for those who may lose their jobs. I know that the Minister has been directly involved with the Ards Institute of Further and Higher Education, and he mentioned the Bridge to Employment scheme, which has been training people specifically for Bombardier Shorts. What will happen if these people are made redundant? How will the scheme be affected?

The Ards institute is already oversubscribed, and there are few places available for retraining schemes. With particular reference to that institute, will the Department ensure that retraining money and places are made available for those who may lose their jobs? What will be done for the subcontractors and workers from subsidiary companies?

Sean Farren (Social Democratic and Labour Party, North Antrim)

The Member must appreciate that we have not yet received details about the needs of workers who are likely to be made redundant. When that information becomes available and the jobcentres assess the needs, we will be able to help people to make decisions about the kind of assistance they need.

If they need training, we will direct them to the training that they believe could be beneficial and we will ensure that it is available. We have considerable experience, through the various forms of training support, to enable us to meet the challenges. The Engineering Training Council is assisting us in identifying possible alternative placements for those on the Bridge to Employment training programme so that opportunities can be provided to enable them to complete training and to obtain employment when the training has been completed.

The Bridge to Employment scheme is only one example of how Bombardier Shorts has been working with us to provide targeted training opportunities for the long-term unemployed. It is regrettable that those on the programme are unlikely, as it now seems, to find an outlet in Shorts for the skills that they are acquiring. Every assistance is being mobilised to ensure that vacancies elsewhere will be open to them.

Mary Nelis (Sinn Féin, Foyle)

Go raibh maith agat, a Cheann Comhairle. I share the concerns of both Ministers about such large- scale redundancies at Bombardier Shorts. Those job losses could also affect my constituency of Foyle and the small enterprise of Maydown Precision Engineering Ltd. Does the Minister have any evidence that that company will be affected, and does he have a rescue package for the small firm, given that the Foyle constituency has lost well over 3,000 jobs in recent years. Does the Minister have any indication of the number of indirect job losses that there may be? What precisely can LEDU do to assist small and medium- sized enterprises?

John (Speaker, Belfast East)

Before I call upon the Minister to respond, I must say that he is not necessarily responsible for LEDU. In fairness to the Minister, some of the Member’s questions may have to be answered in writing by another Minister.

Sean Farren (Social Democratic and Labour Party, North Antrim)

We do not yet have precise information on the full impact, although we have more information about the likely impact on Bombardier Shorts than elsewhere. Until that information is available, we will be unable to take precise steps. Today, I am outlining our general approach, the initiative that we are taking with Bombardier Shorts on the temporary jobcentre at Interpoint and the nature of the support through information guidance that will be made available to workers who are made redundant.

I am sure that all Members hope that the impact elsewhere will be at the lowest possible level and that there will be no impact at all on Maydown Precision Engineering Ltd. If there is an impact, we will provide the necessary information, guidance and direction for those concerned. In the event of a recovery, we will provide the service in conjunction with management to ensure that any upturn can be adequately and effectively met with the skills required.

Roy Beggs (UUP, East Antrim)

Research and development are important for maintaining long-term jobs in Northern Ireland. Does the Minister agree that such an instance reinforces the importance of long-term investment in research and development so that jobs are grown and sustained? Will this cause him to reassess the importance of research and development to our local economy?

Sean Farren (Social Democratic and Labour Party, North Antrim)

We are very conscious of the significance of research and development, whether in the aerospace industry or in any other. We have worked very hard with the universities and with IRTU in the Department of Enterprise, Trade and Investment to ensure that we maximise support for research and development.

With regard to the aerospace industry, the Member may be aware that Bombardier Shorts has invested significantly in facilities and personnel for research to be conducted in such places as Queen’s University, Belfast. That is a statement of its commitment to the development of research and development in aerospace in Northern Ireland.

The Member may be assured of my Department’s deep concern. We have reviewed the matter of research and development, and a working party is determining how we, together with our universities and industry, can better support it. As a result of the NI Economic Council’s report of last year, a co-ordinated approach is being adopted across the Government.

Joe Hendron (Social Democratic and Labour Party, Belfast West)

I thank Bombardier Shorts for all its work and interest in Northern Ireland over the years. My constituency of West Belfast is also affected.

We all understand the impact of redundancy on the lives of those whose jobs are directly affected. I appreciate that the Minister’s Department has been engaged with management at Bombardier Shorts to ensure that full and comprehensive support can be given to those who will lose their jobs. Should a temporary jobcentre be set up in Shorts?

Sean Farren (Social Democratic and Labour Party, North Antrim)

In conjunction with Bombardier Shorts a temporary jobcentre is being established at Interpoint in the heart of the city. That will directly target the needs of those from Bombardier Shorts who become redundant. I must stress, however, that workers may not find the location convenient to plants at Newtownabbey or Dunmurry. It may be more convenient for them to use the services of staff at their local jobcentres: staff who will be just as competent and expert at dealing with their needs.

I trust that both the temporary centre and the existing network of jobcentres will provide an adequate response to the particular needs of those who seek the advice and services that are available.

Social Security Fraud Bill: Consideration Stage

Fred Cobain (UUP, Belfast North)

The Committee has some concerns about clause 1 and the obtaining of information. However, before addressing these concerns, I thank the Minister, his officials, Committee members and the Committee staff for their contributions to the production of the Committee’s report.

Clause 1 amends and adds to the investigator’s powers that are provided for in a number of sections in the Social Security Administration (Northern Ireland) Act 1992. Along with clauses 2, 3, 4 and 5, it deals with the broad issue of obtaining and sharing information.

The Committee is concerned with the wording of subsection (2)(c) and the implications that it might have for honest, ordinary people who are in receipt of benefit. The possibility of infringing human rights was raised in the course of our discussions. The Committee considers that the provisions of the subsection might be seen as giving investigating officers too much power to look at an individual’s financial affairs, especially before clearly establishing whether there are any grounds for believing that there may be fraudulent activity. However, the Committee accepts that the Bill provides for a code of practice that staff would have to adhere to and that the code may well deal with the points raised by it. Nevertheless, the Committee believes that it would be helpful if the Minister gave some assurances to the House.

Can the Minister confirm that the powers of investigation will be used sensitively, and exercised only after careful consideration by senior managers? In cases with grounds for suspecting organised attempts at major fraud, will the use of these powers be monitored for the purpose of conducting a review of the workings of the code of practice within three years of its introduction, and will the findings of that review be reported to the Assembly?

Michelle Gildernew (Sinn Féin, Fermanagh and South Tyrone)

Go raibh maith agat, a Cheann Comhairle. The Committee Stage of the Bill was valuable, and a number of issues that concerned the Committee were raised. These concerns, as the Chairperson pointed out, are still present. I have spoken before, both in Committee meetings and in the House, about the difficulty of obtaining benefits. We have received numerous complaints from people in the Six Counties about the way in which they are treated in social security offices. The criminalisation of people who are genuinely in need of benefits is widespread. We are now bringing in a Bill that will give the Department for Social Development more draconian powers to investigate individuals and the right to look at bank accounts with neither the permission of the person under investigation nor the need to notify them. That is absolutely disgraceful.

The entire system is geared to saving money. That may result in those who are the most vulnerable and in need being denied their entitlement to benefits — entitlement, not privilege — and there seems to be little that the Social Security Agency is prepared to do about it. Instead, we put thousands of pounds into investigating fraud, while many more thousands are not paid to those who are entitled to them. We talk about providing work for those who can do it and benefits for those who cannot, but in practice we do our best to deprive many people of the benefits that they are entitled to and need desperately.

The Committee saw the draft code of practice that was prepared on the basis of one that exists in England. Can the Minister assure me that the code of practice here will be drawn up locally and take our circumstances into consideration?

Unionist Members — and some others — seem to think that any deviation from legislation passed in London results in a weakening of the Union. The circumstances in Belfast, Derry, Tyrone and Fermanagh are different from those in Birmingham and Manchester. We should not be afraid to draw up legislation to suit our needs, rather than running, lemming-like, to copy every piece of legislation passed in England. Go raibh maith agat.

Sammy Wilson (DUP, Belfast East)

The comments made by the Chairperson of the Social Development Committee reflected accurately the views of the Committee. However, it should be recognised that the Committee did not feel that any amendments to clause 1 were necessary. Several Committee members, including myself, asked the Department’s officials what they meant by the phrase "reasonable grounds". Despite what Members have said today, the Department is not being given carte blanche to plunder bank accounts or inquire into people’s private affairs. In answer to a question that I posed, a departmental official made it clear that the phrase "reasonable grounds" meant that there must already be some evidence of fraud and that officials would have to examine utility bills and other information to prove that fraud was being committed.

The House must bear in mind the fact that £73 million is lost every year because of social security fraud. Most people who claim benefit are honest and are not trying to claim money to which they are not entitled. Therefore, it is incumbent on the Department to deal with fraud, so that people who claim benefit are not all tarred with the same brush. The Social Security Fraud Bill makes provision for the Department to do that.

The Bill is parity legislation. It has been said that we should not slavishly follow what happens at Westminster, but we are the net recipients of some £3,000 million in benefit payments every year. I am sure that some Treasury officials would love us to break parity, so that they could deal with Northern Ireland locally. Benefit rates in Northern Ireland could then be adjusted, and new benefit rates would not apply here. Parity legislation protects benefit recipients.

The Committee considered the Bill in detail, and officials came along to answer our questions. We raised some concerns, and — rightly — we asked what certain parts of the Bill meant. The proof of how the Committee felt about the Bill can be found on page 8 of the report, in our conclusions and recommendations. We agreed unanimously — I emphasise that we were unanimous — that the clauses of the Bill should stand. Following our investigation, during which we received explanations and assurances from departmental officials, we agreed that the Bill was necessary if we were to stop money that could be used to deal with social problems going to people who are not entitled to it.

Danny O'Connor (Social Democratic and Labour Party, East Antrim)

I accept what Mr Wilson said about parity legislation. However, some of the legislation that covers Northern Ireland is completely different from that in the rest of the UK, particularly legislation that deals with human rights and equal opportunities. I expressed my concerns in Committee about the ability to delve into people’s backgrounds on a whim. An official from the Department for Social Development told the Committee that the Department must carry out investigations, and that to pry into people’s bank accounts, their private lives and their utility bills was a necessary part of that. There was no mention of a person’s right to be treated as innocent until proven guilty. I have grave reservations about that aspect of the legislation. We accept that social security fraud occurs and that it must be eliminated. However, we hope that the Department shows as much resolve in ensuring that other errors are stamped out.

Last year, the Comptroller and Auditor General told us that Social Security Agency offices did not communicate with each other. When the Department received a form that stated that a claimant was in receipt of other benefits, employees did not check to find out if that was the case.

Departmental irregularities exist that account for many errors in the system. During the Committee Stage consideration of the report, I asked the departmental official about benefit uptake. He said that the Department had no money to spend on benefit uptake because it was too busy chasing fraudsters. The shoe must be worn on both feet. If we are going to go after fraudsters —

Sammy Wilson (DUP, Belfast East)

Will the Member give way?

Danny O'Connor (Social Democratic and Labour Party, East Antrim)

I am almost finished.

The official said that a code of practice would be introduced. However, I am not convinced that that code of practice will protect the individual. We would like the Department to do all that it can to pursue individuals who have committed fraud, but to invade an individual’s privacy is not necessarily the right approach. Article 8 of schedule 1 to the Human Rights Act 1998 states that

"Everyone has the right to respect for his private and family life".

The Article accepts that the state has the right to investigate wrongdoings, but can we decide if a person is guilty of wrongdoings on the basis of an anonymous, and perhaps malicious, phone call? We must take account of such issues and ensure that they are written into the code of practice before we give our full support to the Bill.

In accepting that this is parity legislation — and to some extent it is a done deal — perhaps the Westminster Government should take into account the Northern Ireland’s special circumstances. Last year, Committees debated the issue of criminal assets recovery, but this legislation does not make provision to share information with any agency, were one to be established. I accept that it is parity legislation, although I support it with great reluctance.

Sammy Wilson (DUP, Belfast East)

Will the Member give way? Is he giving way or sitting down?

John (Speaker, Belfast East)

Members must realise that this is not the Second Stage of the Bill, in which its principles can be debated. Members who wish to table amendments to the Bill should do so. Amendments are not necessarily tabled so that the House can divide and an amendment can be passed. They can be tabled as probing amendments in order to create a debate on the issue and to receive a ministerial response. The amendment can then be withdrawn, which is a perfectly proper way to proceed.

The opportunity to speak on the motion that the clause stand part of the Bill is proper in only two circumstances. One is to give the Chairperson and the Deputy Chairperson of the Committee a technical opportunity to provide feedback. The other is in circumstances in which Members wish to vote against the motion that the clause stand part of the Bill, and thereby use it as a mechanism to wreck a Bill. It would be a device for wrecking a Bill, if Members wanted to do that.

I urge Members not to treat this debate as a secondary debate, or as an opportunity to make specific points that would be better made by tabling an amendment that could then be debated and receive a ministerial response. There would then be no need for the House to divide, because the Member could simply withdraw the amendment. That is the proper way to proceed. As yet the Assembly has not accumulated enough experience in legislation to be familiar with all the possibilities. I am simply drawing these opportunities to Members’ attention for the future.

Maurice Morrow (DUP, Fermanagh and South Tyrone)

I thank the Chairperson of the Social Development Committee, Mr Cobain, for his broad support of the Bill. I reiterate what I have said in the House on previous occasions, and place on record my appreciation of the constructive attitude that he has adopted throughout and the assistance he has given. I acknowledge the Committee’s concern about aspects of the obtaining and sharing of information provisions in the Bill, and I hope to be able to allay those concerns.

First, the Committee has recommended that the Assembly should seek assurances that the operation of safeguards relating to the obtaining and sharing of information will be subject to rigorous management checks. I am happy to provide such assurances, and can confirm that my Department will ensure that only authorised officers may make requests for information under those powers, and that they have received full training in their correct application. The number of authorised officers will be strictly limited, and they will be located in the central unit of the Department’s benefits investigation service. Authorised officers who obtain information from organisations in the public and private sectors are bound by law to observe confidentiality and security at all times.

The procedures to be followed are set out clearly in the code of practice, and will be subject to rigorous management checks to ensure that they are followed correctly. Any enquiry made without good reason could lead to disciplinary action against the officer concerned. The Department’s internal audit team, which is independent and entirely separate from the investigative process, will provide an extra tier of assurance. They will audit procedures to ensure that all management checks are carried out thoroughly and regularly. Periodic reports will be provided to senior managers.

Secondly, in cases where there is only a believed intention to commit a benefit offence, the Committee has suggested that the powers of investigation should be exercised only in cases of suspected organised attempts at major fraud. A wide variety of frauds are perpetrated against the benefit system. These range from the person who does not tell the Department that he has started work, or who fails to declare savings or capital in a bank or building society, to the highly organised criminal gangs involved in counterfeiting or stealing instruments of payment and running false identity frauds. The Department needs to be able to use the powers provided for in the Bill in all appropriate cases, not only in cases of organised major fraud. How the Department can use the powers is governed by a code of practice. The main requirement is that there should be reasonable grounds for suspecting that a person is committing a benefit offence or contravening social security legislation. In all cases, an authorised officer must be wholly satisfied that there is a convincing logical basis for suspecting fraud and that other, less intrusive, means have been considered and ruled out before making the decision to obtain information from a third party.

The confidentiality statement on claim forms for all benefits will clearly tell the claimants that information provided may be checked with third parties, including banks. Anyone expressing dissatisfaction about the way that an authorised officer has used the powers, or the unreasonableness of the authorised officer’s actions when obtaining information, can make a complaint. The complaint procedure will be set out in the code of practice.

Members recognise the benefits of the long-established policy of parity. As people in Northern Ireland pay the same rates of income tax and national insurance contributions as those in Great Britain, they are entitled to enjoy the same rights and benefits as people in Great Britain. Parity, however, is a two-edged sword. Rights to benefits have to be matched by obligations to society. If it is right that we should enjoy the same rights and benefits as people in Great Britain, it is equally right that we should play our part in tackling the problem of benefit fraud. This is particularly so given, as I explained to the Assembly before, our dependence on subsidy from Great Britain to keep our social security system afloat. It would be patently wrong to deny my Department this useful tool in tackling fraud and to allow benefit fraud to continue when perpetrators in Great Britain can be investigated.

The Committee recommended that the code of practice should be reviewed within three years of its publication and the outcome reported to the Assembly. The Department will continually monitor the use of the powers, and benefit investigation services will report regularly to senior managers on the position. I assure Members that the Department will review the code of practice within three years and report the outcome to the Assembly.

Members have voiced some concerns. My Department is concerned about the uptake of benefits. It is important that people get the benefit they are entitled to, and my Department has committed resources to ensure that that happens. Fraud is not investigated simply because of a mysterious, miscellaneous or unknown phone call — it may be used as evidence, but it is not taken as the sole source for an investigation.

I thank Mr Sammy Wilson for his comments. He has been positive and sees exactly what we are trying to achieve through the legislation. Danny O’Connor voiced concerns about human rights. My Department is equally concerned, but we have adequately addressed that particular matter. The European Convention on Human Rights provides for instances where human rights have to be restricted, where such measures are necessary to deal with issues of public policy such as fraud.

I reassure the House and the Member that the matter has been dealt with. It is something that we are all concerned about, and it is not the intention, either wilfully or unknowingly, to infringe people’s human rights. I acknowledge that people do have human rights. I also assure Mr O’Connor that my Department spends money on benefit uptake. He said that we were too busy investigating fraud and that we had neither the time nor the resources needed for benefit uptake. That is not the case. We put many resources into ensuring that people take up their benefits.

I have dealt with the code of practice, and I give the necessary assurance to the House as to the way forward.

Clause 1 ordered to stand part of the Bill.

Clauses 2 to 18 ordered to stand part of the Bill.

Schedule agreed to.

Long title agreed to.

John (Speaker, Belfast East)

That concludes the Consideration Stage. The Bill now stands referred to the Speaker.

Industrial Development Bill: Committee Stage (Period Extension)

John (Speaker, Belfast East)

There being less than five minutes until we interrupt for Question Time, I do not propose to proceed with the next item of business, which would be the votes on the amendment and the substantive motion on the Human Rights Commission which were debated last week. As there are likely to be votes requiring record, that would take around 20 minutes, thus delaying Question Time.

The sitting was suspended at 2.26 pm.

On resuming (Mr Deputy Speaker [Sir John Gorman] in the Chair) —

Petition of Concern: Northern Ireland Human Rights Commission

John (Speaker, Belfast East)

During the debate on the Northern Ireland Human Rights Commission on Tuesday 25 September a valid petition of concern, signed by 30 Members, was lodged with the Business Office on the motion. In accordance with Standing Order 27, no vote could therefore be held until at least one day had passed. The Business Committee considered the matter that day and agreed that the vote be placed on the Order Paper for today. The Business Committee agreed that the vote on the amendment and the motion would take place today.

The effect of a petition of concern is to change the vote to a cross-community vote. This applies only to the motion. The vote on the amendment would therefore be carried — if it were carried — on a simple majority basis, but the vote on the motion, or the motion as amended, if the amendment were carried, will be on a cross-community basis.

I remind Members that this item of business was included solely for the purpose of conducting the vote, not to provide a further opportunity for debate.

Motion proposed [25 September]:

That this Assembly believes, in the context of the development of a Bill of Rights, that the Northern Ireland Human Rights Commission has failed to discharge its remit, as given to it by the Belfast Agreement (1998), in its various contributions to the debate on developing human rights in Northern Ireland. – [Dr Birnie.]

Amendment proposed [25 September]

"has been hindered in discharging its remit due to limits on its powers and resources but congratulates the Commission on its substantial contributions to the debate on and in developing human rights in Northern Ireland." – [Mr Attwood.]

Question put

The Assembly divided: Ayes 37; Noes 48

Ayes

Mr Attwood, Mrs E Bell, Mr Bradley, Mr Byrne, Mrs Courtney, Mr Dallat, Ms de Brún, Mr A Doherty, Mr Durkan, Mr Ervine, Dr Farren, Mr Ford, Mr Gallagher, Ms Gildernew, Dr Hendron, Mr B Hutchinson, Mr G Kelly, Mr J Kelly, Ms Lewsley, Mr Maginness, Mr Maskey, Mr McCarthy, Dr McDonnell, Mr McElduff, Mr McGrady, Mr McMenamin, Mr McNamee, Mr Molloy, Mr C Murphy, Mr M Murphy, Mr Neeson, Mrs Nelis, Mr O’Connor, Dr O’Hagan, Mr ONeill, Ms Ramsey, Mr Tierney.

Noes

Dr Adamson, Mr Agnew, Ms Armitage, Mr Armstrong, Mr Beggs, Mr B Bell, Mr Berry, Dr Birnie, Mr Boyd, Mr Campbell, Mr Carrick, Mrs Carson, Mr Clyde, Mr Cobain, Rev Robert Coulter, Mr Dalton, Mr Davis, Mr Dodds, Mr Douglas, Mr Foster, Mr Gibson, Sir John Gorman, Mr Hamilton, Mr Hay, Mr Hilditch, Mr Hussey, Mr R Hutchinson, Mr Kane, Mr Kennedy, Lord Kilclooney, Mr Leslie, Mr McClarty, Mr McFarland, Mr McGimpsey, Mr Morrow, Mr Poots, Mrs I Robinson, Mr K Robinson, Mr M Robinson, Mr P Robinson, Mr Roche, Mr Savage, Mr Shannon, Mr Weir, Mr Wells, Mr C Wilson, Mr J Wilson, Mr S Wilson.

Question accordingly negatived.

Main Question put.

The Assembly divided: Ayes 48, Noes 39

AYES

Unionist:

Dr Adamson, Mr Agnew, Ms Armitage, Mr Armstrong, Mr Beggs, Mr B Bell, Mr Berry, Dr Birnie, Mr Boyd, Mr Campbell, Mr Carrick, Mrs Carson, Mr Clyde, Mr Cobain, Rev Robert Coulter, Mr Dalton, Mr Davis, Mr Dodds, Mr Douglas, Mr Foster, Mr Gibson, Sir John Gorman, Mr Hamilton, Mr Hay, Mr Hilditch, Mr Hussey, Mr R Hutchinson, Mr Kane, Mr Kennedy, Lord Kilclooney, Mr Leslie, Mr McClarty, Mr McFarland, Mr McGimpsey, Mr Morrow, Mr Poots, Mrs I Robinson, Mr K Robinson, Mr M Robinson, Mr P Robinson, Mr Roche, Mr Savage, Mr Shannon, Mr Weir, Mr Wells, Mr C Wilson, Mr J Wilson, Mr S Wilson.

Noes

Nationalist:

Mr Attwood, Mr Bradley, Mr Byrne, Mrs Courtney, Mr Dallat, Ms de Brún, Mr A Doherty, Mr Durkan, Dr Farren, Mr Gallagher, Ms Gildernew, Dr Hendron, Mr G Kelly, Mr J Kelly, Ms Lewsley, Mr Maginness, Mr Maskey, Dr McDonnell, Mr McElduff, Mr McGrady, Mr McMenamin, Mr McNamee, Mr Molloy, Mr C Murphy, Mr M Murphy, Mrs Nelis, Mr O’Connor, Dr O’Hagan, Mr ONeill, Ms Ramsey, Mr Tierney.

Unionist:

Mr Ervine, Mr B Hutchinson.

Other:

Mrs E Bell, Mr Ford, Mr McCarthy, Ms McWilliams, Ms Morrice, Mr Neeson.

Total Votes 87 Total Ayes 48 ( 55.2%) Nationalist Votes 31 Nationalist Ayes 0 ( 0.0%) Unionist Votes 50 Unionist Ayes 48 ( 96.0%)

Main Question accordingly negatived (cross-community vote).

Townland Names

Kieran McCarthy (Alliance, Strangford)

I beg to move

That this Assembly calls on each Government Department to adopt a policy of using and promoting townland names in all Government correspondence and official documents.

In the late 1960s, major changes were made to the method by which our mainly rural and residential addresses were identified. The reason given was that our postal and delivery services were being modernised and computerised. The words "speed" and "efficiency" were used. Nobody could quarrel with those sentiments. However, with speed and efficiency there usually come casualties. In this case the casualty was our beautiful and historic townland names.

In many cases names, such as these in my constituency of Strangford, were dropped: Ballygraffan, Tullytramon, Ballyfinragh and Tullynacrew. I am certain that there were many more. I leave it to other Members to pronounce the names of townlands that were dropped from use in their own areas. I am aware that, at the time of the change, strong representations were made against the loss of our townland names — unfortunately, with little success.

The omission of these names must deprive many of the present generation and future generations of the knowledge of the rich history of many of these areas. Townland names often referred to an easily identifiable feature of the surrounding landscape; for example, "carraig" means "rock", "tullagh" means "hill" and "bally" means "settlement of". In my own place of origin, Ballycranbeg is "the townland of the small tree", and the name of the neighbouring townland, Ballycranmore, means "big tree". Ballycranmore survived the modernisation of the postal service; Ballycranbeg fell by the wayside.

However, I am happy to say that, with the help of our local council, we resurrected the name of Ballycranbeg around the hamlet there. Unfortunately, that cannot be done for every townland. As someone who cherishes our heritage — be it built, Christian or cultural— I consider the restoration and revival, as far as possible, of our townland names to be very important to our local history. We may have partially lost that history in the 1960s, but we now have an opportunity to rectify that. I consider the Assembly to be a means by which to bring that restoration about.

Earlier I used the words "speed" and "efficiency". We have all benefited from speed and efficiency, because we receive letters and packages more quickly. We also benefit from good use of the postcode system. Perhaps the Royal Mail could consider matching each townland name with a postcode. Indeed, last week the Royal Mail assured me that it has no objection to the inclusion of townland names in postal addresses and confirmed that that has always been its policy. Therefore, it is up to us to encourage the use of townland names in our addresses. The Royal Mail stresses the need for clear addressing, with particular emphasis on the postcode.

A lot of correspondence is sent out from Government Departments on a daily basis, perhaps even on a twice- daily basis. If the Departments included townland names in their addresses, the community would, in time, see the positive results of the initiative. The relevant information is easily accessible to Government Departments because townland names are clearly marked on Ordnance Survey maps. The electoral register indicates the townlands in which the various rural roads and communities are located.

I am also aware that local historical societies, of which there are many in Northern Ireland, including the Federation for Ulster Local Studies, the Ulster Place- Name Society and many other organisations, are very supportive of the motion. Concern has been expressed that the ‘Shaping our Future’ document, of which we are all aware, paid scant notice to the need to reintroduce our townland names. Perhaps even at this late stage, the authors of ‘Shaping our Future’ could be encouraged to use the townland names across Northern Ireland. If the Assembly and Government Departments can take the lead in restoring those names, I have no doubt that private businesses and individuals would soon follow. I ask Members to support the motion, and I appeal to our rural residents to use, and to encourage others to use, these names. If that happened, a little bit of our heritage would be restored and saved.

John (Speaker, Belfast East)

The House will be aware that the debate is limited to one hour. Since the start of the debate, several Members have requested a chance to speak, so I must restrict Members to five minutes each.

Joan Carson (UUP, Fermanagh and South Tyrone)

I commend the Members for bringing forward this motion, because the issue of townland names has always been dear to my heart. Townland names have been passed down from early days and are a wonderful store of information that is in danger of being totally lost. That is mainly due to the renaming of our roads willy-nilly by some desk-bound people, without thought or consideration for local opinions.

I have always welcomed the stance taken by Fermanagh District Council, and I wish that other councils in Northern Ireland would follow by retaining townland names. In the Tyrone area, where I live, we have a proliferation of the same names applied to roads leading to and from the village of Moy.

All of those roads are called Moy Road. There is a Moy Road in Portadown; a Moy Road in Moy; a Moy Road in Armagh; and a Moy Road in Dungannon. You can imagine the confusion that that leads to. The new designation was supposed to help, but instead it has led to great confusion, so most people began to use the townland names again.

I live on one of those Moy Roads and I find my mail going hither and thither along another Moy Road. I, in turn, was receiving mail intended for those who lived at the same house number on another Moy Road. I solved my problem by adding the townland name to my address. Thankfully, since then, there have been no more problems. I encourage people who are experiencing similar problems to start using the townland names again.

I will go back into the mists of time — not quite as far as the origin of townlands — to when I was a teacher. When my pupils and I undertook projects on the school’s area, I always encouraged the children to start their information searches by using the townland name. Much to my amusement, we always found that the townland name would have the same description as the original town. I remember having great amusement when I was teaching in a school called Annaghmore Primary School. When the children were starting their project I asked which of them had a big, mossy, springy field at the back of their house that they could jump up and down on. The pupils would say "Please Miss, have you been to our house?" I told them that I knew that information from the townland name, Annaghmore — "the big bog".

I encourage all of our Departments, the councils and, in particular, the public, to use townland names. Townland names must be retained or we will lose much of our wonderful and picturesque heritage. I welcome the motion and have great pleasure in supporting it.

Eddie McGrady (Social Democratic and Labour Party, South Down)

I commend Mr McCarthy and Mr Ford for putting the motion before the House.

There are about 10,000 townlands in Northern Ireland and they are a unique expression of our heritage — a heritage that is at our fingertips. That sense of identity and heritage has been lost due to things such as numbering vague roads that can be up to 15 miles long. Some townland names date back to the eighth century; they help us to recognise the topography and history of an area. It is sad that we have allowed the use of townland names to disappear from our areas — due to the great pressure put on councils by the Post Office for convenience of delivery.

Local district councils have the authority to determine the postal addresses in their areas — not the Assembly or the Government. Councils have failed to use that authority, with the notable and honourable exception of Fermanagh District Council, which resisted re-designation at the time.

I remember proposing a motion in my district asking that the townland names be retained with the number and road system suggested by the Post Office. The resolution was passed unanimously. However, that was the last we heard of it — some 12 years ago — and it seems that the council has not had time to get round to dealing with the issue again. Therefore although there was a willingness to do something about it, that willingness was not translated into action.

The re-designation that was almost imposed on us by the Post Office did not take place in England, Scotland or Wales, where there is a much greater dispersal of houses and towns. Fair play to the Post Office: it got away with it — but it was our fault that it did. We should try to restore the use of townland names as soon as possible because of the advent of the Assembly and the enormous amount of heritage the names represent. The entire legal documentation system is based on townlands and it is a very convenient way of identifying legal title as well as an area’s history and heritage.

For practical purposes, that might suit the Post Office, but it will suit only the Post Office. On several occasions in my own area I have met ambulance drivers in distress, who asked me where such-and-such a house was on a certain road. I then had to ask them which end of the road they meant, because it is either 10 miles to the left or 10 miles to the right. If the driver does not know the townland, the house cannot be identified. The same applies to other emergency services. Townlands identify a very narrow locality. It is particularly helpful for emergency services to be able to go to a townland.

There is no good reason why we cannot have a combination that suits both postal delivery and lineal house numbering on long stretches of road. In my constituency, near where I live, a road runs from Strangford to Ardglass, a distance of some 10 miles. There are numerous townlands on the road, and unless one knows the sequence of house numbers, one cannot give people directions. If one starts from Downpatrick, one goes in one direction to Strangford and another to Ardglass, two entirely different directions. Unless one knows the townland, one cannot give people directions. That is one practical reason why townlands should be restored.

It should be borne in mind that it is already in our provenance to change that situation. We do not need legislation or statutory instruments because local councils can decide on correct postal addresses. I encourage the other 25 local councils to readopt the system that will protect our identity, our identity and our heritage. I pledge my full support for any public campaign that the Member initiates after approval by all parties in the House.

Oliver Gibson (DUP, West Tyrone)

"There’s Cavanamara and dark Derrymeen, There’s Carrickatane and Munderrydoe, With Strawletterdallan and Cavankilgreen All dancing a jig with Cregganconroe."

There are three essential reasons why townlands should be retained. First, there is a legal reason. Most of us live in or own property that is identified by its county, its barony and its townland. Legally, we should retain a townland system.

Secondly, there is an administrative reason. In the second and third centuries, when Christian sects from near the Sudan or southern Egypt started to trade along the Atlantic coastline, they introduced into Ushnagh Hill in Westmeath the idea of identifying areas and putting in boundaries. It is an ancient system of identifying a landmass by sheughs, burns, mountain tops or whatever. That was important when St Patrick and later saints started to build an ecclesiastical system of boundaries based on the existing townlands.

That idea has been developed in a modern administration. None of us can lift an electoral register without seeing areas whose building blocks are townlands. If one looks at a map of district electoral divisions and wards — even properties and electoral areas in the conurbations — they are often called by their old townland names.

It was a rush of blood by the Post Office 30 or 40 years ago that hailed the modern words "efficiency" and "rationalisation". We must restore the integrity that supports the ecclesiastical boundaries and the legal system: there is no alternative when it comes to supporting the administrative electoral system. In other words, we must have measures that can keep, or adjust, the boundaries as time goes on. The building blocks for those measures are the townlands; therefore, we have every right to retain them.

Since Fermanagh resisted putting up road names — and Omagh Council still resists — may I suggest that for those of us who are forced to do so, the townland name should be placed above the road name. Funding should be made available for some good artistic stone work, so that passers-by can read the name of one townland on one side of a stone and another townland on the other.

We must re-identify the areas. In the last 30 years we have lost a generation of people who knew where the countryside boundaries were.

I appeal to Government Departments — who can readily change this — and to the other agencies that seem resistant to the introduction of townland names. These agencies are usually the quangos, the milk marketing boards and other bodies, which when asked to use the townland names will resist by saying, "If the man wants his cheque, the official name is such-and-such". I want to end with the lines of the poem by W F Marshall, and I will cut them short by simply saying that everyone has their own Fernaghandrum and Sanaghanroe. I support the motion.

Pat McNamee (Sinn Féin, Newry and Armagh)

Go raibh maith agat, a Cheann Comhairle. Ba mhaith liom labhairt i bhfách leis an rún agus cuirim fáilte roimhe. Ba chóir don Tionól brú a chur ar gach Roinn Rialtais úsáid a bhaint as logainmneacha agus iad a chur chun cinn. Sílim go bhfuil sé oiriúnach ar fad bheith ag caint i nGaeilge ar an ábhar seo, mar tagann an chuid is mó de na logainmneacha ón teanga Ghaeilge í féin. Fiú sna leaganacha Béarla tá rian na Gaeilge le cluinstin. Leoga, cheap mé gur i nGaeilge a bhí an Teachta deireannach ag labhairt nuair a luaigh sé sraith de logainmneacha as Gaeilge. Mar a dúirt mé, tagann logainmneacha ar fud na tíre ón teanga Ghaeilge. Baineann logainmneacha le bunadh áite agus le stair áite agus le tírdhreach áite.

I welcome the motion. The use of Irish is particularly appropriate when speaking on the motion because the townland names come from the Irish language, although they have been somewhat anglicised. For a while I thought the last Member was speaking in Irish when he listed a series of townland names.

The townland name relates to the people of a place, particularly those in rural communities because they identify themselves by their townland — and they can be very clannish. If one tells them that they are from Cullaville, they will say that they are from Clonalig, because Clonalig is their townland. If one tells them that they are from Camlough, they will say that they are from Carrickcroppan.

Townland names also describe the topography. A name can be a description of the local geographical feature of an area, be it the "dogs’ rock", the "goats’ rock", the "black rock" or the "Mass Rock". It has a sense of community identity.

We live in an age of numbers. Often when one telephones someone to carry out a transaction, one must give one’s telephone number, national insurance number, tax reference number, credit card number and of course one’s postcode. Numbers are very impersonal; they have no character or sense of personal identity. It is somewhat dehumanising to reduce our titles and sense of identity to numbers.

There is a positive side to postcodes. I would not for one minute argue that BT35 7BZ is a more attractive way of describing the place where someone lives than Derramore. Nor is BT35 9BZ a more attractive way of describing Rathkeelan. In the South they do not use postcodes; they use the townland name, the nearest post office, the nearest town and the county. That can be ambiguous. We have an advantage in that the postcode system is in place. There is no reason for the townland name’s not being incorporated. It does not create any problem for the postal service if a postcode is already on the letter. The house number and the post code identify where each house is to the postal workers.

The Rate Collection Agency already uses the townland name for each rated property. If people look at their rates bills, which is perhaps not the nicest thing to do — and we will not refer to Assembly policies on that matter — they will see that townland names are used. The Rate Collection Agency has the database available to implement the system. I welcome the motion. Go raibh maith agat.

P J Bradley (Social Democratic and Labour Party, South Down)

I recall that there was a similar motion in Newry and Mourne District Council. It was passed and has been acted upon, and road names now carry the townland names. There is still room for improvement. I welcome the opportunity that Mr McCarthy and Mr Ford have given us today to bring this to a higher level. I am particularly pleased to see the junior Minister, a country boy, Mr Denis Haughey, here to deal with this, rather than a confused Minister from Leamington Spa or Finchley trying to understand what we are talking about.

Last week in the Adjournment debate, I referred to traffic congestion in Drumcashlone and Carneyhaugh. About 700 or 800 people live in those areas, and very few of them knew that they lived there. They are mainly housing estates with fancy titles and numbers, such as MrMcNamee referred to. For that reason alone, I deliberately chose to use the townland names to try to get a message home to the residents, and in particular to the young.

About two months ago, Conor Bradford referred one morning on the radio to the beautiful townland names. He intended to get back to it sometime. He was referring to one of my areas — the townland of Clontifleece. If he ever gets back to that I can refer him to Clontifleece, Attical, Derryogue, Drumbonniff, Deehommed, Knochanarney — I could go on for hours on nice townland names. I hope that this debate will move things further, because a degree of lip service has been paid to this matter for maybe 20 or 25 years. Now that we have the Assembly I hope that the motion will get support and be acted upon.

Jim Shannon (DUP, Strangford)

Wi the maist fek o fowk, tounlann steidnames michtna be mukkil o a threip for oor ain Assemlie — whaniver we see yins daein murther an shuitin up an doun oor raws an loanins. But the loss o steidnames is mair pruif o the reddin oot o oor kintra fowkgates an heirskip.

To many people, townland names many not seem a serious issue to be debated in the Assembly when people have been murdered and gunned down in the street. However, the disappearance of townland names is further evidence of the eradication of our local culture and history. We are becoming ever more merged into the vague European identity that has been forced on us by the European Union to the detriment of our local heritage that is slowly ebbing away. The issue is more relevant today than ever. The identification of nationality is a symbol used to define it, whether that be flags, language, currency or local place names.

Although there is a willingness to give our flags away, our language is also under threat. It is important that we try to retain some of the history of our country. The Government would rather have the easy-to-use postal codes that pigeon-hole us into BT19 or BT23. It is an easy and clinical way of identifying who lives where. Our tradition of townland names reached back to the sixteenth century; and townland names were a person’s address, whether he knew how to write them or not. By the nineteenth century, townland names were part of how people defined themselves. They inscribed their townlands on their tombstones and entered their townland names under "nationality" when boarding ships to America and Australia.

The descendants of those people who left Ulster return to find the townlands that they have links to. They have letters and postcards with addresses on them, and some have maps and souvenirs, yet our own Government will not recognise the diverse and rich past of our country and its townland names.

The use of townland names is also a romantic link to the past and to the adventures of old. We do not say that Betsy Gray came from Newtownards BT23; rather we say that she came from Ballygrainey, close to the Six Road Ends. It is much more true to the storytelling culture of this land to use the townland names. The names of our townlands are truly ingenious and denote the long and varied history of different parts of this country.

My constituency has Viking, Scottish and English words mixed in with the Ulster names of the area. My constituency has over 2,700 townland names, and they are referred to daily. I have been in the houses of my older constituents who have regaled me with their local history. That is an important and untapped source of strength in these times of turmoil. The older people do not understand the removal of their past and the making of land into sub-lands of the nearest large town. For example, nearly every townland in Strangford has an address that ends in Newtownards BT23, et cetera.

We are trying to bring tourists here, and we are trying to promote our uniqueness to the rest of the UK. One of those differences has to be townland names like Ballyalloly or Ballywhatticock. The use of townland names is essential to what we all believe is quintessentially Northern Ireland.

Many poets use townland names in their poetry. Our most famous poet, Séamus Heaney, uses local names in his poetry, and I quote —

"So I say to myself Gweebarra and its music hits off the place like water hitting off granite. I see the glittering sound."

There are many more across the Province who, like Séamus Heaney, use the townland names. What would we leave our aspiring poets if we took away the townland names. The availability of unusual poetic names would be gone, and it is hard to find words that rhyme with BT19, BT23 or BT6. I support the motion.

Barry McElduff (Sinn Féin, West Tyrone)

Go raibh maith agat, a Cheann Comhairle. Molaimse an rún seo fosta. Baineann sé le logainmneacha atá stairiúil, traidisiúnta agus atá fíorthábhtach ag daoine ar fud na hÉireann.

I commend the motion tabled by the Alliance Party Members for Strangford and South Antrim. I also welcome the emerging consensus around this crucial issue. Perhaps it is universal, but it is certainly an Irish characteristic to be proud of where one comes from and to have a real sense of place and belonging. Townlands are an ancient land unit. There are more than 64,000 of them in Ireland. They have existed through the ages, and some names have proved more durable and more resistant to so-called modernisation than others; but all are resonant with meaning, mystery and beauty.

Townland names provide a living link with the Irish language, and with our history. There are variations in spelling, local pronunciations, and translations that become unreliable. They speak of landscapes, topography, geographical features and clans. They speak of occupations and trades, animals and trees, churches, saints and ancient battlefields. They speak in colourful and descriptive language of beautiful-sounding place names, which give people a real sense of place.

Some speakers have traced the history of interference with townland names to the Post Office devices of the 1960s. Brian Friel’s tragic play ‘Translations’ takes us back much further. It has a powerfully emotive theme, and is set in Donegal in the 1830s when the British Army’s engineering corps carried out its famous ordnance survey of Ireland. It mapped and renamed the whole country to suit the agenda of faceless civil servants in far-off places with no local knowledge who wished to bin centuries of history and culture. It was vandalism of the most insidious kind. It was an example of cultural imperialism. The play explores the crisis of language in the context of a crisis in a family. Owen, the son of a hedge schoolmaster who taught Greek and Latin through Irish, returns from Dublin as a member of the engineering corps to map and rename areas in his native Donegal.

Reference has been made to Post Office attempts to do away with townland names in the name of modernisation, to assign names and numbers to country roads, and perhaps to incorporate the name of one townland into the name of the road. On the surface, that might have appeared to be positive. However, it wiped out other townland names in the process.

I am mindful that the townland name was the postal address, and if it were still so, as it is in County Fermanagh and elsewhere in Ireland, it would be more accurate for ambulance services and doctors who are attempting to reach people in their homes. Mr Haughey will be familiar with Burn Road in Cookstown, which stretches for miles and miles. Drum Road is similar. Emergency services can get lost, and have to come back several miles to find their destination.

I want to draw attention to a problem for the people of Carrickmore in County Tyrone. Sixmilecross has a larger postal sorting office, which means that the very name of Carrickmore is threatened with extinction. Believe it or not, the postal address of Main Street, Carrickmore is now Main Street, Sixmilecross. We have tried to secure a meeting with Royal Mail to discuss the problem, but it is resistant. Nobody has a problem with Sixmilecross appearing beneath Carrickmore on a postal address, but it is simply unacceptable that it be used as a substitute.

The role of councils has been mentioned. I have recently been appointed chairman of Omagh District Council, and we plan to address the matter seriously in the very near future. There is tremendous international interest in preservation, promotion and proactive campaigning around our townlands. Irish exiles in America and Australia return home to discover their roots and townland names are important in tracing those roots. Go raibh maith agat.

(Madam Deputy Speaker [Ms Morrice] in the Chair)

Tommy Gallagher (Social Democratic and Labour Party, Fermanagh and South Tyrone)

I hope that in supporting the motion I can also provide some idea of the Fermanagh experience, the benefit of which might help to enlighten minds. Fermanagh District Council has always insisted on the retention of townland names. It has consistently opposed the introduction of road naming and numbering of houses. However, the council is at present revising that policy, because, in recent years, people have increasingly made complaints about shortcomings in the system.

Residents have experienced difficulties when trying to do business with some companies in England. For example, some credit card companies require applicants to provide a road name and house number. Applications are refused unless this information is provided. Insurance companies apply that policy with increasing frequency, and in certain cases they will not provide cover if applicants are unable to supply a road name and a house number.

In view of that, we should try to devise a way to retain our townland names on correspondence, in the same way as Fermanagh District Council is revising its policy. However, at the same time, we need to avoid restricting opportunities for people to avail of keen rates offered by financial organisations such as credit card companies and insurance brokers.

The best way forward for everybody is a system whereby the name of the townland, the road and the house number are used in every address. References have been made to the fact that the tax office, the Electoral Office, and, to some extent, the Housing Executive include road names in their correspondence. We should not build on that work, because, in the case of Fermanagh, the road names used in such correspondence mean little to the people who live there.

Before we implement any changes, we should take time to consult with local councils and communities to get the best possible information. It may be necessary to carry out some pilot studies among local district councils, but the best approach is to make sure that our townland names are preserved. We need to be careful about the way in which we progress. Today’s motion is a very useful first step, and I support it.

John Dallat (Social Democratic and Labour Party, East Londonderry)

Our townlands are our heritage appreciated by all without division or dispute. I therefore welcome the motion, which, for a change, unites us on a common issue.

As our cities, towns and villages experience varying degrees of development sprawl, townland names have tended to be squeezed out as developers opt for names more appropriate to leafy suburbs of English towns. I have no objections to names such as South Winds, Pine Trees or Cedar Gardens, but I prefer the name of the townland in which I live: Gortmacrane, which means "stony field". It denotes breadth as well as length. Ninety-five per cent of townland names have their origin in the Irish language and, as Members have already demonstrated, one needs only a cursory knowledge of the language to develop a keen interest in our place names.

The issue before the House today is not new. Practically every council has called for the retention of townland names. The motion can make a difference for the first time, because we now have the power to instruct Departments to include townland names, and they must listen. Townland names have length and breadth; they can be measured and are critical to many Departments in cases in which ownership of land is an issue. Perhaps if Departments had paid more attention to townland names, fewer mistakes might have been made. The Department of Agriculture and Rural Development, for example, might not have paid an agriculture grant to a farmer for Lady Dixon Park, as was recently discovered by the public auditor.

However, the critical issue revolves around heritage, and fortunately that is something that Members no longer argue about in this respect. Members all cherish their place names, not only for personal satisfaction and pride but because they want to retain them for future generations. The townland issue has been bounced about for too long. It is time to act and put townland names back on the maps to paint a picture, sketch a scene or vividly describe the places in which we live.

When townlands first became an issue our postal service was called "the Post Office", but today it is "Consignia". For its own reasons the Post Office has no allegiance to names, heritage or tradition, so it would be foolish to follow Postman Pat. Let us stick with what we have. I am sticking to Gortmacrane, even though the farmers have gathered most of the stones that gave it its name, which means the stony field.

Annie Courtney (Social Democratic and Labour Party, Foyle)

I support the motion and congratulate Mr Ford and Mr McCarthy for tabling it. Townlands existed long before parishes and counties. Their original Irish names were written in English form as they sounded to English court scribes. A townland name in its original Irish form often referred to an easily identifiable feature of the landscape such as a "carraig", which means "rock", or a "tulach", which means "hill".

The social customs or history of people who have lived in a place can also be reflected in the name of a townland. Often those names are the only records that survive of families who held the land in pre-plantation times. An example of that is "baile" meaning settlement, and that prefix can be found all over Ireland in such place names as Ballywalter, Ballyshannon, Ballymoney and others.

Many townlands in Ireland took their names from early habitation sites — ecclesiastical and secular. Examples include "rath", which means "fortification", and "dún", which means "fort". In County Tyrone there is Dunamanagh, or Donemana, which means "the fortress of the monks", and in Donegal one will find the Dunree fort.

It was often through the townland name that entitlement to land was determined, and that was important for inheritance purposes. For a long time prior to the Local Government (Miscellaneous Provisions) (Northern Ireland) Order 1995, councils were bound by the Towns Improvement Clauses Act 1847, the Public Health and Local Government (Miscellaneous Provisions) Act (Northern Ireland) 1949 and the Public Health Acts Amendment 1907. However, those were all repealed in the 1995 Order, and since then councils have had limited powers to do anything. It is almost impossible to change names.

Developers have no authority to name streets or developments. Derry City Council belatedly followed Fermanagh’s example and developed a relationship with planners and developers to ensure that names would not be used except with the agreement of the city council. Derry City Council has promoted the use of townland names over the years. That has had cross-party support, and a lot of research continues to go into the naming of new estates and housing developments. Derry City Council has a policy of encouraging developers to research proposed names before presenting them to the council for approval. That policy is well known and is facilitated through the culture subcommittee.

It is a matter of record that many proposed names relating to contractors’ families, popular soap operas or known personalities in an area have been rejected, and any proposed names must have some relevance to the area or original townland. That policy can work. The debate is important, and Departments must take it seriously and start using townland names.

Over the years it has been almost impossible to complete an official form without the postcode or the correct postal address, but Derry City Council also includes the townlands. I come from a rural background, and I do not want to lose the townland.

Denis Haughey (Social Democratic and Labour Party, Mid Ulster)

I am pleased to take part in this debate. I have long been of the view that society is at risk of losing something important and central to its identity if the use of townland names sinks into decline and disappears from our vocabulary and consciousness.

When a similar motion was tabled at one of our party conferences, a party colleague began his speech by saying that there were four reasons why the loss of townland names should be resisted: first, Altaglushan; secondly, Munderadoe; thirdly, Munterevlin; and fourthly, Drumballyhugh. What a tragedy it would be if all the richness, tradition and history inherent in those names were to be lost.

My postcode is BT80, but the town of Cookstown is built on five townlands — Derryloran, Gortalowry, Coolnafranky, Killymoon and Tullagh. It would be a tragedy if those names were lost. People in Cookstown still refer to certain commercial premises as "So-and-so’s down in Gortalowry" or "So-and-so’s over in Monrush" and to other local townlands.

It was said that it was in the power of councils to determine policy on the use of townland names. It was also said that Fermanagh District Council had an honourable record in that regard. I plead the case for my district council; it took the decision some years ago that all new signs bearing road names would have the townland name — Drumballyhugh or wherever — in bright red lettering underneath. Mr McGrady and Mr McElduff made the point that some long roads run for up to 10 miles, making it difficult for an emergency services driver to locate a particular house if the numbering of properties along that road is inadequate.

Mrs Carson referred to the number of roads around Dungannon that have the same name — Moy Road, Portadown; Moy Road, Dungannon; Moy Road, Moy; and Moy Road, Armagh. How could the driver of an ambulance be absolutely sure of his destination in those circumstances? MrGibson made the significant point that property is legally identified by county, by barony and by townland name.

Chuir cuid cainte Pat McNamee i gcuimhne domh ócáid amháin tá cupla bliain ó shin nuair a dúirt comhairleoir de chuid Chomhairle Ard Mhacha nuair a bhí an chomhairle ag plé an ábhair seo: "Ní bheidh áitainm Gaeilge ar Drumnahunshin a fhad agus a bheas mise beo". I was saying, Madam Deputy Speaker, that there was an occasion some years ago when an Armagh councillor said that there would be no Irish place names in Drumnahunshin as long as he was around to prevent it.

Mr Shannon and Mr Gibson reminded us that townland names are not just part of the Irish tradition; they are very much part of the Ulster-Scots tradition also. Mr Shannon talked about Betsy Gray and the Six Road Ends in his part of the world. Mr McElduff talked about the strong sense of place and belonging that is characteristic of people in his area. When he spoke about Carrickmore, I was not sure where he was talking about because in my dancing days we always referred to "Carmen", which was a corruption of the Irish word "tearmann".

Mr Gallagher made a number of noteworthy points about the legal aspects of, for example, insurance matters and said that there was no reason why road names and townland names could not both be used. That would give us a double dunder.

Mr John Dallat referred to the stony fields of his part of the world. Mrs Courtney talked about title to land, and she also referred to the fact that there was no division between the parties on the issue; that has been an essential characteristic of the debate. This is an important issue for people of all traditions in the North, including me. I have been at the fore in trying to preserve townland names in my district.

At present, the Administration has no policy to promote the use of townland names in correspondence and official documents. The motion, which calls on Departments to promote townland names, suggests that the Administration should take a more proactive role in doing so. Researchers at Queen’s University, Belfast have worked on a project that covers townland names from all over the North. Other Members may have had some contact with it. The appropriate Committee may wish to consider taking evidence from that project.

I hate to be a bore, but I must say that any change in policy has resource and cost implications. I have no right to give any undertaking on behalf of the Administration to make changes to policy until costs are properly quantified, however strong my personal support for the motion. Northern Ireland Departments will facilitate the use of townland addresses when they have been notified of them. Departments will reply to correspondence using the address given, including the townland name. I cannot go further than that, other than to confirm my support for the motion. I will report the views expressed during the debate to ministerial Colleagues through the appropriate channels.

David Ford (Alliance, South Antrim)

It is a great pleasure to wind up a debate in which everybody supports the motion. At least, that was the case until the Junior Minister — as opposed to Denis Haughey — spoke, which was a little sad. We have seen that townlands can have legal, administrative and ecclesiastical identities; I confess that the last of those was news to me. Above all, they give us pride in our culture and history and a sense of place. The modern system of addressing, by road name and number, does not give the sense of place that the use of the historic townland name gives us.

Since the late 1960s, Royal Mail’s policy towards townlands has been toleration, not encouragement. For all that Royal Mail — or Consignia — says that it will accept the use of a townland name, the name is dropped if an address becomes too long. Royal Mail has an electronic database of addresses. If I go into a shop and give my postcode, they can tell me my road name and postal town, but there is no space for the townland; there is something fundamentally wrong with that. Although Royal Mail says that it has not sought to destroy townlands, the actions of others using the addressing system that the Royal Mail promoted and rural district councils adopted has had that effect. That is why firm, speedy action is essential.

Members have highlighted the historical and cultural aspects of townland names. It was a pleasure to sit between the poems of WF Marshall, from Oliver Gibson on my left, and the Irish language from Pat McNamee, Barry McElduff and Denis Haughey to my right. Clearly, townlands are significant to people. I was delighted that Jim Shannon somehow managed to drag in a heroine from 1798 to support the cause of townlands; but if the DUP is adopting that policy then that is fine by me.

There is an issue about whether this subject relates to the culture of every side and section of the community; it is something that we can build on together. I do not claim to have a knowledge of Irish, as demonstrated by the two Members from Sinn Féin, but my love for townland names in the area in which I live came from an elderly neighbour who died a few years ago. He did not speak a word of Irish, nor did he claim to, but he made it his business to find out what the names of the townlands meant.

It is clear, as other Members have said, that virtually every townland is still recognisable as meaning something. Indeed, only last week, when introduced to me, someone said "Ah, you are the man from Tardree." I pointed out that while my wife came from Tardree, I came from the neighbouring townland of Barnish. That was a fascinating example of how somebody who knew the neighbourhood thought in terms of townland and not road name.

It has been pointed out that many of our names have been corrupted. I am not sure that the Royal Engineers did it in a spirit of malice; it may have been a case of ignorance. Tardree is a classic example in that the name should be "Ardree", because anybody who saw the mountain before the Forest Service came along would have known that "the height of the heather" did not require the word to have a superfluous English "T". John Dallat made a similar point. If the stones have been cleared, so what? If that is the historic name of the townland, it stands for something in our cultural background.

I am delighted that a number of Members made positive suggestions about actions that can be, and have been, taken. Joan Carson’s reference to getting primary-school children to use the townland as the basis for local studies is clearly a way to inspire the young and make them think in later life. P J Bradley highlighted his use of two townland names in an Adjournment motion last week. I am not quite sure about Oliver Gibson’s suggestion that a boundary stone should be placed at every point where a road crosses a townland, but there may be something in that which will get the message across. I welcome what Annie Courtney and Cllr Denis Haughey said about Derry and Cookstown regarding their work on adding townland names to road signs. I got Antrim Borough Council to agree to that. It is a small step, but one that moves things forward.

We have problems in ensuring that Departments take the responsibilities that have been outlined by every section of the House. It is clear that there should be a policy that forms have a space left for the townland to be inserted. Some organisations, such as the Electoral Office, seem to do that quite well; many others fail. We need a policy of encouraging Departments to use correct townland names. In my area, the Roads Service is quite good at referring to junctions by the name of the next townland but one, rather than the one in which they are actually located.

We must face the fact that, without serious action, we run into the danger that I highlighted earlier — if the address is too long, the townland will be omitted. While I welcomed Denis Haughey’s comments in the early part of his speech, I was disappointed that he could but plead resource implications. If he is going to do that, then we may have to use up more resources by asking him questions about how much it will cost to add the odd box to the odd form or encourage Departments to look at a map and get the townland name right. I cannot see how that would have significant resource implications. The motion has been supported unanimously by the House, and the Minister ought to heed what Denis Haughey and others have said.

Question put and agreed to.

Resolved:

That this Assembly calls on each Government Department to adopt a policy of using and promoting townland names in all Government correspondence and official documents.

Alternatives to Private Finance Initiatives / Public-Private Partnership

Francie Molloy (Sinn Féin, Mid Ulster)

I beg to move

That this Assembly calls on the Executive to investigate and promote alternatives to Private Finance Initiatives/Public Private Partnership as a means of funding capital investment.

Go raibh maith agat, a LeasCheann Comhairle. It is timely that we have a debate on the subject of the private finance initiative (PFI). I use the term PFI deliberately as there has been a public exercise to change it to PPP (public-private partnerships).

The PFI of the past carried the baggage of bad contracts and projects. The new Labour Government put their usual spin on it and came up with the idea of public-private partnership. There is no partnership aspect to it — only private finance and profit-making.

The motion is designed to move us along. It is not meant to simply explore the various aspects of PFI but to look at the available alternatives and to encourage the Executive to take up those issues and investigate the alternatives. Earlier this year the Finance and Personnel Committee produced a report on PFI and made several recommendations. One in particular was that public funds and public services should be in the public domain.

Last week the Minister of Finance and Personnel — who has just entered the Chamber — made it very clear that there is not enough money to provide public services and to meet the requirements of the Programme for Government. That is not acceptable. This is a fledgling legislative Assembly. We have set an agenda in the Programme for Government that is heavily underpinned by PFI. We must commit ourselves to exploring the means of ensuring that we have the public funds to provide the necessary services.

Our public services — the hospitals, the schools and the roads infrastructure — are in crisis. A considerable injection of money is required to maintain them, never mind extend them. Money must be made available to retrain and encourage nurses, doctors and professionals to return to the Health Service.

We need to break the cycle. We have fallen into the trap of continuing as though direct rule still applied, and we have not come up with new ideas. I support the Minister of Finance and Personnel in his endeavours to get the extra finance that is needed. I do not, however, support the idea that the extra money should be obtained by increasing the rates or by "back door" taxes such as water and sewerage charges. That is not the way. We need to look at alternatives — bonds might be one possibility.

We need to be up front and honest. New investment in the system is required, but we must be careful not to charge down the same road as the British Labour Party in producing new taxes and other devices for raising the money. Those measures simply tax the people who most deserve the services and, in many cases, those who have been deprived of them. The problem with the rates is that they are applied to households. Each pays in line with the variations. Some people do not have to pay rates. Some rural areas, particularly west of the Bann, do not have such services as sewerage and public water. Our targeting for resources has to be fair and must not overload people.

How forcefully has the Minister put the arguments to the British Exchequer? How do we rectify the legacy of underfunding by successive British Governments under direct rule? Has the Minister pointed out the legacy of discrimination and the fact that the finances that should have been put into areas west of the Bann for hospitals, schools and infrastructure were not put in? How do we re-balance that and make the British Government come up with the required funding? It cannot simply be done under the Barnett formula on its own. We need to come up with ideas.

The Barnett formula works on a headcount and does not reflect the need in our area. Our society is emerging from conflict. Are those arguments being made? Despite being told that there is no money available, and being asked how much money we will raise ourselves, we must question the British Government on whether they are prepared to rectify the imbalance in past spending.

I do not intend to become bogged down in the pros and cons of PFI. However, we either think about a dependency on PFI companies and the fact that we will be handing matters over to the private sector to build, direct and maintain, or we look at the alternatives. One alternative is "back door" taxation; it was, and still is, favoured by the British Government. Such a method would fail us and those who elected us. We must come up with alternatives.

The Finance and Personnel Committee reached several conclusions about the operation of PFI. Its primary conclusion was that public services must remain under public control. They should be financed with public money.

I note that the Executive have established a forum to investigate PFI and its implementation. Can the Minister confirm that the forum is looking at the alternatives to PFI and not simply at the current implementation of PFI? Has the forum been tasked with trying to break the cycle? Has it been tasked with looking for alternatives?

There are insufficient public funds, and we have been told that we must use PFI. Those who have been involved in PFI have told us that it is not suitable for all contracts and projects. There must be an alternative. Private companies may not be interested in a particular scheme because of its rurality or because they do not see it as a means of making money quickly. How do we deal with that?

How do we ensure that staff in schools, hospitals and other services are not disenfranchised by PFI and private finance taking over? Are we heading for a situation in which schools will not only be managed and built by PFI but in which the pupils will be taught by PFI? That is a serious consequence. We must look at what Tony Blair is proposing in England. More and more of the running, teaching and management of schools will become part of PFI.

The Committee’s report made it clear that we must caution people about the contracts that are being set up now. Various Departments are forging ahead with PFI contracts. Have the Committee’s recommendations been implemented? Twelve months down the road, or when the departmental review takes place, we could find that contracts have already been signed up to and that mistakes have been made. I urge the Minister to caution Departments that there is a clear strategy to follow when putting such contracts in place. We must learn from the mistakes that have occurred in hospital — and other — contracts, particularly in England.

Other means of raising finance came up in the inquiry. Some people in Dublin said that they had had a clear option — public finance was available for schemes, but they chose to use PFI. However, the background here is that PFI was brought in because public funds were not available. The situation is different now — public funds are available. Public borrowing is cheaper, and other options, including the European Investment Bank, are available. Do we need to stick rigidly to PFI?

The British Treasury does not allow us to go down that road. That is hindering the Assembly’s establishment. We do not have control of our own taxation or finances, and we depend on the Barnett formula to provide us with the headcount and to deliver the money accordingly. The headcount does not provide the necessary funds. However, if, for example, the Assembly were able to sell bonds to the public, who would be guaranteed a steady stream of income for the years to come, a significant amount of money would be raised for investment. In the past, the British Government have used that system to finance schemes. The system has also been proposed for the London Underground, and it has been used in the USA, particularly in New York and Boston. We must look at the alternatives.

We do not possess the limited tax-varying powers of the Scottish Parliament. However, we do have the power to set the level of the regional rate. We must recognise that that is not a significant part of overall public expenditure. Some would argue that that is not a significant amount of money on top of the rates. However, it is additional to the present rates, which some would say are high enough. I am concerned that the Minister is looking into doubling the regional rate in order to catch up with England, Scotland and Wales. I remind the Minister that those countries provide different services and they have different ways of providing those services. Although we do not raise a significant amount of money through rates, I ask the Minister to recognise that it is an unfair system of taxation.

The present system asks those people who have neither the services nor the infrastructure to pay the same as those who do. The issue of toll bridges has been mentioned. Again, those people who have been deprived of services for years are being asked to pay. For example, it has been suggested that the bridge on the Toome bypass should be a toll bridge. That denies access to the fast track into Belfast to those who did not have the services. Those who have had to move from the west to the east because of their employment will now be charged more because they were deprived in the past. I do not rule out any options, but we must continue to look at the alternatives. We should look at alternative sites and at how we raise money. If we introduce tolls, we should ask not only those who use a particular bridge or stretch of road to pay, but we should spread the load to ensure that we do not further tax those who have been deprived in the past.

We must get to grips with the issue because we cannot go from year to year without enough money to expand or provide services. We must face our responsibilities, but we must be sure that the form of taxation and the way that we deliver services — whether that be through bonds, PFI or any other method — is done in the most suitable way for a particular project. It is not enough to say that we do not have enough money to provide services or to fund them properly. We must move ourselves into a position in which we can fund services, and we need control of our own fiscal policy. Rather than tax-raising powers, we need tax-varying powers that will give us the freedom to explore how we borrow public money, as well as how we spend it.

James Leslie (UUP, North Antrim)

We are speculating on these Benches about the notion that we need tax-varying powers rather than tax-raising powers to raise money. We are not sure that we understand the distinction. If we are looking for more money, we must mean raising taxes. We pay too much tax already, and I am doubtful about the value of the Government services that we get for that tax. There is opposition on these Benches to the notion of raising more tax. However, we acknowledge that in order to spend a greater amount of money on public services, especially to clear the infrastructure deficit, money must be found from somewhere. You either pay for it, or you pay for it.

Regardless of whether the money is borrowed through the issuing of a bond — thereby deferring the final payment, but with interest being paid in the interim — sooner or later the bond must be redeemed. That means that all the money that is borrowed in the first place must be paid back with interest.

Alternatively, as is current practice, the Government can take as much money out of the block grant as they can to spend on infrastructure.

The third way is for the public sector to provide some of those services, for which it will charge a fee that will give it reasonable profits. We do not want the public sector to make what we believe to be unreasonable profits. The public sector wants to avoid making what it regards as unreasonably low profits for their efforts put in the risk they take.

The fourth option, which may well be a function of the second, is to make the user pay for the service by introducing tolls — a word that Mr Molloy was careful not to use. With a toll, for example, on a bridge or a road, only one kind of person pays: the person who uses it. As long as use of the service is voluntary, it is not unreasonable to invite people to pay for that extra convenience. In countries and cities where toll roads are in place, such as France and Hong Kong, the road usage by workers in particular is tremendous. For example, for a lorry driver on his way to a port, time is money, so it is worthwhile for him to pay the toll. Of course, it is important to judge the right price for the toll so that it does not become a disincentive to using the road and that it generates sufficient revenue.

Only the user pays the toll. The rest of us do not have to — although we all pay tax, and if the Government are providing those services, then, in effect, we are paying for it. The more the Government provides, the more we all must pay through tax. It is a question of whether one wants to contribute to the general pool in the hope of getting what one considers to be value for money, or whether one would rather pay only for the individual services that one wants. I am not going to get into the issue of healthcare. I see Dr McDonnell looking thoughtful. He will be well aware that that is at the core of the healthcare problem.

I have no alternative but to go into some technical detail on bonds. I am concerned that although we have some grasp of the notion, we have not grasped all the pertinent facts. In July, the Enterprise, Trade and Investment Committee circulated a paper entitled ‘Bonds – a Capital Idea’. I read the paper with some concern, and I trust that people who are interested in that area will read other literature to inform themselves on the subject.

The biggest issuer of bonds here is the Government, and the biggest issuer of bonds in the world is the Government of the USA, as they need more money than any other country. The UK Government has been issuing bonds for over 200 years; they pioneered the concept and have managed public finances very successfully by so doing. In recent years, there has been a surplus on the account, and the net level of Government debt has been reduced. That is essentially because when bonds become due, they have already been repaid and a replacement has not been issued.

However, given that the corporation tax revenue will undoubtedly fall in the United Kingdom over the next two or three years, the likelihood is that the Government will either have to raise more taxes or borrow more money. They will probably borrow more money or perhaps opt for a combination of the two.

There is not all that much debt around with a maturity of over 20 years, and the Government are not borrowing much money for that length of time. As a result, the opportunity exists for the right kind of organisation — with a good credit rating — to borrow money relatively cheaply over 20 to 30 years.

That window is gradually closing. It was conspicuous that last week when the Treasury went to the market for £500 million, it was on 25-year maturity. In fact, today I dug out from the Government web site the plan for the current financial year. They plan to issue around £5 billion of the £13 billion they need to borrow — so well over a third will be in long maturity, in the 20-year area. Clearly, the Government have spotted the opportunity to generate money. Gradually one will find that there is more paper available in that area and that therefore, the yields will rise.

It has been asserted that bonds are a cheap way of borrowing money. However, one must be very cautious about that statement. The Government can borrow money reasonably cheaply by issuing bonds because Government are regarded as undoubted. They will definitely pay the interest and definitely redeem the bond on time and therefore get privilege for that certainty — they pay a lower rate of interest than the public sector. Whether a bond is cheap or expensive is, more than anything else, a function of the rate of inflation and the anticipated rate of inflation. If one invested now in a bond issued by the Government yielding 4·75%, you would, if you were the market, knock off the expected rate of inflation of about 2·3% and say that that is worth 2·4% real, or 2·4% over inflation. The tradition, certainly in the training that was drummed into me, was that when the real interest rate was more than 2·5% that was getting expensive. On the other hand, lending at a rate of interest that was more than 2·5% real was pretty good — one was getting good money. That is why the interest rate on index-linked yields is usually 2·5% real. That is regarded as the rate that the market needs when it thinks it has got good value.

Much has been made of the buyout of the Welsh Water services by Glas Cymru. I consulted my friend Ian Adamson to find out how to pronounce this company’s name — I trust that he is right. We must be cautious about that particular example, for that was the deal from heaven. The company was being asset-stripped — it did not want the Welsh Water bit because it would not make it much money; nor did it want the £1·8 billion debt. When somebody made an offer for it, a deal could be done. We must be clear that just over half of the bonds issued there were at a very high credit rating. The market thinks that they are good and has attached a pretty low yield to them. Typically, the yield on those bonds is about 1% more than an equivalent Government bond — 5·75% is roughly the yield on those bonds at present. They are 28-year bonds, which mature in 2028. That is the triple-A-rated part of the financing of that buyout — £1 billion worth.

The other £800 million, however, was not nearly so tasty as far as the market was concerned. It carried a much higher degree of risk with it. The single A bonds yield 154 basis points over the equivalent Treasury bond. They yield about 6·2% or 6·25%. The triple-B-rated bond, which is the lowest grade of bond, is 250 basis points over the Treasury’s, which means that it is yielding well over 7%. In other words, the market thinks there is substantial risk attached to that bond and therefore wants quite a high rate of interest if it is going to buy it. Compare this with the equivalent bond issued by Severn Trent or Anglian Water, which is yielding about 6·4%. With regard to Glas Cymru and the bonds it issued to finance its buyout of Welsh Water, it is borrowing £1 billion of the £1·8 billion it needs at fairly fine rates of interest. However, the £800 million is becoming expensive.

The notion that all that money is cheap is simply not true. There is a considerable difference between high- graded paper and the lower graded. Moderately well rated corporate paper is yielding approximately 6.4% at the moment, and that is reasonably expensive borrowing. If one regards inflation as being about 2.3%, that is about 4% real.

Often a company takes the view that a bond is issued only when money cannot be obtained in any other way. A cheaper way of raising money is to tap the shareholders through a rights issue and get it through equity. Another is to borrow it from a bank, and that might be the better option if interest rates are likely to go down. The advantage in a bond lies in the certainty, and that applies to the borrower and lender. Each knows how much interest will be paid each year for the specified number of years and when the date of repayment is.

If finance for Northern Ireland’s infrastructure is to be raised by issuing bonds, the interest payments and repayment of the money must be addressed, and it is unlikely that the asset will be sold. For example, the water industry must borrow £2 billion over the next two years, so repayment of the £2 billion and the interest — and interest of 4% or 6% on £2 billion is quite a lot of money — must be considered. I know that the £2 billion does not have to be spent all at once — this is a 20-year scheme. However, we must be realistic about where the money comes from, and it can only come from two sources.

One source is the Government, and they spend tomorrow’s money today by borrowing money from themselves and paying it back later. Another source is the consumer: for example, charging for water, as is done with electricity, or subsidising it, or a mixture of the two. A good example here is Scottish Rail, a private company that the Government subsidise by more than £20 million a year. Scottish Rail offers a fantastic service. It might be easier to sell and subsidise a railway service than run it, having defined the quality of service in advance. Those are the areas that should be considered when looking at alternative means of financing Government services.

We must be realistic about deciding what we are prepared to pay for and who ought to pay, given that money will not drop out of the sky. However, I do not dismiss the notion that we should look at ways of accelerating the rate at which we make progress by finding ways to harness either the private sector or private-sector financing.

The Minister will deal with that much better, but Treasury rules will make it difficult, if not impossible, for the Executive to issue bonds. There are devices that can be used to spin the assets into a certain company that is still controlled by the Government, but I will leave that matter to the Minister because I am sure that he will get it absolutely right.

We are spending tomorrow’s money today, and we must be careful about how much of tomorrow’s money we have hocked up in advance. Nonetheless, looking at those alternative approaches, one may conclude that one could generate enough revenue by improving the quality of the service. One may also conclude that the problem of repaying the debt that one incurred would not be as great as the current problem — that practically nobody wants to use, for example, the rail service. Raising revenue by improving services might be a lot cheaper.

As I keep saying, we cannot escape the fact that somehow we will have to pay for this. The questions are: who pays; what is the timing; and what is regarded as a reasonable risk to take on when managing our infrastructure development in these ways?

I am conscious that I have been speaking for some time, and others will no doubt want to speak. I trust that this is an issue — and the matters relating to it such as PFI and PPP — with which the Assembly and particularly the Executive will continue to wrestle. Indeed, I think that the ball is with the Executive at the moment. I certainly would not like to claim that I know the answers. There are horses for courses in this area. Experience in PFI is still fairly short, and better solutions will gradually be devised over time. Depending on the particular service that is involved, the answer will be different. It is crucial that we are having a debate and an active investigation into this matter. For that reason, while I am concerned about some of the logic driving Mr Molloy’s motion, I nonetheless believe that the sentiment is entirely correct and therefore give it my support.

Patricia Lewsley (Social Democratic and Labour Party, Lagan Valley)

All the available resources under the Barnett formula are insufficient to meet the needs of our society. It would be desirable to have all of our public services funded from public resources, but unfortunately that is not possible, so we must look at all innovative means by which we can make up the shortfall.

We in the SDLP are not in support of privateers seeking to make money out of those projects. We stand for the development of best practice, good value for money and good client services. Our social democratic principles must be tempered with the realism that we must use when promoting the need for value for money. I welcome Mark Durkan’s commitment to examining PFI and PPP as a means of addressing the £3 billion plus legacy of underfunding that resulted from direct rule, a system that the detractors of the Good Friday Agreement wish to return to. It is essential that every aspect of PFI and PPP be examined as we attempt to address this matter. But neither PFI nor PPP is a mature science. We are still learning about them. We must look at models of best practice from everywhere to enable us to develop a model with, what I would call, a Northern Ireland accent.

We must increase the educational provision for children, create better roads, build a stronger economy and increase and improve the care of our sick, elderly and the most vulnerable in our communities. These ambitions drive us forward and spur us to action, but if we are to achieve our goals, we must back them up with a clearly thought out financial strategy. I make no apologies for wanting a strong public service, and central to this thinking is the development of models without bankrupting the Exchequer. As we do not have full financial control of the departmental expenditure limits, we must look further afield to develop a strategy that reflects the needs of our society and seriously tackles social disadvantage.

The report that was put before the House on the inquiry by the Committee for Finance and Personnel on PPP and PFI has already been mentioned by several Members. The recommendations of the Committee include a co-ordinated programme of strategic projects and methods of finance that will address the infrastructure deficit through a sustainable programme of investment. It also recommends further research by the Economic Policy Unit with assistance from the Department of Finance and Personnel on financing mechanisms that can reconcile decisions made on the value for money of schemes against future revenue planning and budgeting for public services.

It also recommends that the support of all key players, including the private and voluntary sectors and local communities, be gained by means of a social partnership approach.

When we utilise the instruments of PFI or PPP, we need to ensure that we evaluate their pertinence and impact. They must be consistent with our core commitment to social democratic objectives and the creation of equality of opportunity, targeting social need, and high quality public services.

There is an overall need to properly examine this complex area. I ask all Members to work intensively with the Minister of Finance and Personnel and to make a significant contribution to the debate. I welcome the Minister’s announcement of a high-level task force, which met last week. It will be examining international experiences and proposing new initiatives to address the funding shortage here.

Finally, it is important that the Assembly look at many ways to build innovative partnerships throughout society that can achieve the development that we need, consistent with social democratic values.

Nigel Dodds (DUP, Belfast North)

As Members have said, this interesting debate has arisen because we do not have enough money from the Treasury to do what we need to do. There is a legacy of underfunding in key areas that will not be rectified overnight by means of an increase in the block grant. It is therefore necessary to look for other ways to finance urgently needed projects and programmes in Northern Ireland. Most of us are in agreement on that, but the exact way in which that is achieved will be the subject of this and further debates.

Too often in the past — especially on the mainland — much of the debate on the matter has centred on the conflict between two people’s dogmas, political principles, and so on. However, proponents of the belief that the private sector does everything best, or that the public sector must do everything, seem at times to abound in roughly equal numbers. That sort of approach does not solve problems, build schools and hospitals, or help to alleviate our historic underfunding of transport, which alone requires investment of some £1 billion over the next 10 years. We need solutions, not sound bites; delivery, not doctrine.

This debate allows us to set out what we want to achieve. Ultimately, the key issue is not how we should do something, but what we should do. The method of delivery is only ever a means to an end. Often, those who castigate the role of PFIs or PPPs do not have a realistic alternative. It is easy to say what needs to be done; it is altogether more difficult to pay to get it done.

There are easy answers and there are realistic answers. Unfortunately, few easy answers are realistic. We need to look for alternatives that successfully answer the question, "Do they work?" We can examine a number of possibilities: we could press for a renegotiation of the Barnett formula and, on the basis of all sorts of reasons, seek to make the case for more funding for Northern Ireland. I agree with many Members who said that we have a very strong case to make. However, as the Minister of Finance and Personnel pointed out last week in his characteristic way,

"We will not get a free run at the rickety wheel when it comes to challenging the Barnett formula."

Even a successful renegotiation of the Barnett formula, or a one-off payment from the Exchequer, would not be solutions in themselves. Other approaches will be necessary. In the past, we have attempted PFI projects in Northern Ireland with varying degrees of success. The role of the private sector, and the efficiencies that it brings, are to be welcomed. However, we must not lose sight of what is happening. We are in effect buying projects on hire purchase. In the long run, this may be a dearer alternative. The private sector may be financing the projects, but we should not forget that the public sector continues to fund them, and to fund the profits of the private enterprise as well.

There are long-term difficulties. Too often in the past, when the private sector entered into negotiation with the public sector, the public sector ended up coming off worst. It is notoriously difficult to estimate what will happen in future years in the more complex PFI projects. We need only look at the agreements reached with the electricity generating companies in the early 1990s to demonstrate that point. As a result, we are left today to face higher bills.

Let us be clear. I believe that there is a place for PFI projects, but we must be sure that there is a sufficient transfer of risk to the private sector to ensure that we are achieving value for money. We must be sure that we are actually achieving efficiencies in the private sector, and that we are getting a better deal than we could in the public sector by using the private sector to carry out aspects of work with carefully defined targets. If it is to deliver, PFI must serve the purpose of delivering projects today which otherwise could not be delivered for years ahead.

Enormous economic benefits flow from using private finance today to make progress today. However, we must not fall into the trap of paying huge fees to consultants to transact with the private sector in a way that will act as a drain on future generations. If there is a genuine transfer of risk, and we reduce costs for the public sector, then they are worthwhile. I fear that the jury is still out on that issue. We do not have the opportunity in this debate to examine in detail the merits of PFI schemes. It is clear, however, that they are not a panacea for our problems. They may be just the start of problems for future generations.

PFI is not the only possible option. There are other ways to make sure that we do things today that will serve us all in the future. Greater use of bonds has been mentioned. The Americans in particular use bonds to finance projects while retaining control in the public sector. It is an attractive option in many ways, although as has been pointed out, it is not free of difficulties. Bonds allow significant amounts of money to be raised at lower interest rates. Instead of the private sector dictating terms to the public sector, the roles are reversed, allowing the public sector to have a greater say in delivering efficiencies, and retaining control.

The Treasury is not keen to allow branches of Government to simply borrow money, run up the public sector borrowing requirement and know that if all goes wrong, the Treasury will pick up the tab. That is problematic. Bonds can be Government-backed, or revenue-backed, or, depending on the nature of the projects, backed by a mixture of revenues, grants and other sources. Instead of having to wait 25 years to get a project completed, the project can be delivered in the short term. While the public is benefiting from it, payment can be made for it. The key is to get approval from the Treasury to allow such borrowing not to be reflected in the public sector borrowing requirement. That is not an easy task, but neither are any of the alternatives.

The opportunity exists for us to make a special case for Northern Ireland. The last 30 years have left us with a legacy of under-investment, not least because of the amount of money that was distracted away from other vital areas of investment in the need to fight terrorism. We are seeing an illustration across the world today of the enormous sums of money that are going to have to be spent in the fight against terrorism. In Northern Ireland, unfortunately, we have been paying that price.

When I hear some Members of the House talk about a lack of investment from Westminster over the years, I just wonder how much more money could have been invested in public services if they had played a role in getting violence and terrorism stopped. This is, of course, a political question. It can be resolved with the necessary will, and it could be an answer to Northern Ireland’s problems.

Our challenge should be to press for such an approach by the Treasury. It will not be easy, but if we can send out one clear message from the Assembly and make our case effectively, such an approach could be made given the exceptional circumstances of Northern Ireland. When the alternatives are either allowing our infrastructure to degenerate further or getting an increase in the amount of money the Treasury directly supplies to Northern Ireland, what I am saying may look like a more realistic approach. Our task in the short term must be to assess this option fully and at the very least keep it open as a possible way forward.

PFI and PPP schemes do have a role to play in Northern Ireland, but let us not be afraid to be innovative in the approach that we take to dealing with the problems that we have been left to tackle.

John Kelly (Sinn Féin, Mid Ulster)

A LeasCheann Comhairle, I welcome this debate. I welcome the motion because it gives us an opportunity to debate a very important matter that can be ideological and doctrinaire. Coming from a trade union background and still being a trade union member, it would be easy for me to slip into a doctrinaire or ideological approach to PFI. It is an important issue, and one that has not received the debate that it deserves. There has been little public debate about PFI.

However, since PFI has been introduced, a number of concerns, including outright opposition, have been raised from a range of bodies. Since the election of the second Blair Government, trade unions in Britain have begun a concerted campaign against PFI, with some threatening strike action if its implementation is continued. In particular, the largest British trade union, Unison, remains vehemently opposed to PFI and has campaigned strongly for its abolition. Perhaps more surprisingly, the British Medical Association has added its voice to those opposing PFI. The British Medical Journal has described PFI as a perfidious financial idiocy that could destroy the NHS.

The Chartered Institute of Public Finance and Accountancy, the National Audit Office and the House of Commons Public Accounts and Health Committees have also raised public concerns about the operation and effects of PFI. So it is not only those people on the left of politics, either here, in the rest of Ireland or elsewhere, who are expressing concerns about PFI. Concerns are being expressed by those august bodies that I have just mentioned.

It is not in opposition to MarkDurkan that we are debating this motion, and it is not a way of getting at anyone. It is an attempt to open up a debate around how we should finance our essential public services — for example, health and education. It is about whether we should allow private finance to take control of those very important services and institutions, or whether public finance ought to keep the main handle on them.

The debate, therefore, on how we pay for public services, on how we protect those services and on the rights of the people who work in them is one we cannot sidestep. The state of our hospitals, schools, roads, railways and sewerage systems demands nothing less than a substantial increase in the money we invest in public services. We all agree on that.

The debate on the future of our public services must bring into focus the fact that we do not yet have economic sovereignty and are subject to the financial resources provided by the British Government. The current economic policy that has come to govern public spending and the interest in using private-sector finance and management are the results of the crisis in public borrowing and 20years of British Conservative rule.

Those who advocate using private money to fund our public services argue that it generates money the public purse simply does not have. It transfers the risk of public-sector borrowing to the private sector. It brings private know-how into the public sector and, by implication, efficiency savings, and it accelerates investment. Those arguments are used by those who are in favour of PFI.

One may ask whether private finance through PFIs or the evolving PPPs — they are the same things — are the only, or even the best, ways forward. The costs of using private money must still be met from the public purse, and it is an expensive way to borrow money.

There are many indicators that the PFI projects entered into five or 10 years ago were not cheaper than they would have been if public money had been used. In some cases PFI projects have resulted in poor safety standards, lower levels of services, poor working conditions and no savings on running costs. But does that mean that PPPs or PFIs should be rejected? Several billion pounds still have to be found to invest in the public services.

Members must not forget that in the British Government’s last comprehensive spending review, PFI accounted for about 14% of investment in the capital building programme. Given Tony Blair’s total conversion to the merits of the private sector, one can expect that figure to increase. When our slice of the British budget is worked out by the flawed and unfair Barnett formula, we will have to fund an even greater portion of our public-sector capital building programme using PFI. In key areas such as health and education the Departments are not getting a fair share of funding from the Minister of Finance and Personnel. In many ways the Assembly has yet to live up to the commitments put forward in the Programme for Government.

If there was a greater level of economic sovereignty we would have more options. Public borrowing is always cheaper than private borrowing, and that is before we start to examine the British Treasury rules that block borrowing from the European Investment Bank — a route that is used to greater effect by other European countries. The Assembly ought to look at that.

Private-sector finance can help accelerate building and investment, but whatever means we use for increasing our investment in vital public services, they must remain under fully accountable public ownership. That is a reasonable objective of any party that calls itself democratic socialist or plain socialist. All Members have an obligation to ensure that those essential services remain under public control and are not given over to PFIs.

We will still pay for finance that is raised by PFI, so is PFI good value for money? There is a case to be made for identifying key public services that should not fall within the remit of PFI and where criteria other than that of profitability should be paramount. That is also essential in public services, and it is an argument put forward by Bob Kiley in his report on the London Underground in which he rejected part privatisation in favour of public bonds. Kiley favours the use of bonds to maximise the benefits of using private finance while services, delivery and management remain under public control and workforce rights are protected. It is essential that the rights of the workforce are protected and not handed over to what can become the ravages of a PFI.

There are a number of options to be examined. It may be difficult, but the unfair Barnett formula should be altered to increase our block grant allocation, and a peace dividend should be secured by transferring expenditure on the British war machine to rebuilding a society emerging from conflict. Greater investment should be made by the Irish Government to meet their financial responsibilities in the North — especially in border areas. Alternatives such as borrowing at preferential rates from such bodies as the European Investment Bank should be considered, and the use of public bonds should be examined. I would not dismiss the notion of public bonds.

Whatever the solution, without economic sovereignty we will be constrained by the British Exchequer. We have to take responsibility for some difficult decisions, and rhetoric will not help when we realise that we need to find billions of pounds to invest in restructuring our hospitals and railways.

A LeasCheann Comhairle, this is not an attempt to have a divisive, ideological or doctrinaire debate. It is an attempt to ask whether there are alternatives to PFI. We ought not to allow the areas critical to the well-being of our community — health and education — to escape the net of public service.

Esmond Birnie (UUP, Belfast South)

Money provides the sinews of Government, and therefore this is an important issue. It is a pity that so few Members are here to debate and consider those crucial matters. I congratulate the Chairman of the Finance and Personnel Committee on tabling the motion. It is appropriate to consider the full range of alternatives. I would not, however, necessarily agree with his comments on the alternatives to PFI and PPP.

My first point relates to the Barnett formula, a matter that is often raised in the House. It has become a litany on these occasions to say that the formula must be renegotiated. That demand is our local parallel to the phrase used by Margaret Thatcher in the 1980s with respect to the renegotiation of the UK’s net contribution to the European Community: "Give us back our money".

I wish the Finance Minister and the Executive well in their dealings with the Treasury. While it is possible that they may succeed, it is equally possible that they will not. If needs throughout the UK are to be assessed on a regional basis, we do not yet know how our needs will compare, after careful research, with those of the south of Wales or the north of England, where social deprivation also exists. Perhaps our needs base will be shown to be the greatest in the UK, but it might also be shown to be equal to the needs of many other regions. We should not assume that by following this route a large increase in the Northern Ireland spending block would be granted. As is the case in many areas, the Northern Ireland Executive must hope for the best, but prepare also for the worst. We need a strategy of regional competitiveness and wealth generation, regardless of what happens as a result of a reassessment or recalculation of the Barnett formula and the Northern Ireland block of public spending funds.

My second point is on the matter of bonds, which Mr Leslie covered well. One of the many problems that might arise if this route is taken is that the institution of water charges would be required. Bonds were used to fund water services in Wales — unlike Mr Leslie, I will not attempt to pronounce the relevant Welsh name. Many Members will remember the discussion in the mid-1990s of the possibility of privatisation in Northern Ireland. The suggestion was supremely unpopular with much of the public.

My third point is that in the proposer’s speech there is something of an enigma or conundrum. It is unclear what he meant by his reference to tax-varying powers. Did he mean tax-raising or tax-lowering powers? That matter will have to be pursued in the future, and quite rightly so. The proposer criticised the one piece of tax-varying power that the Executive have exercised, albeit that the increase has not been more rapid than in Great Britain — the increase in the regional rate. Other Members have made the same criticism in the past. Given that it is not clear what view is being taken on user charges, or so- called toll charges, is a regional income tax, or a regional variation around the national UK rate and levels of income tax, being hinted at?

The Scottish Parliament and Executive have the theoretical power to raise income tax above the UK base rate by up to three pence in the pound. However, it may be significant that to date the Scottish Parliament has not used that power. Some people think that it is extremely unlikely that the Scottish Parliament will use it in the foreseeable future. Even if it did use that power, the quantum of revenue raised might not be very large relative to the total base of revenue in Scotland. The same arguments apply even more forcibly in our region.

As someone who has tried to teach students about so-called regional economics, I know that there is a theoretical argument that when a devolved or federal assembly within a greater fiscal and monetary union varies its spending at the margin, it should also vary its tax at the margin. The argument is that that will help to make the politicians who take such decisions more responsible for those decisions. At the theoretical level, that argument carries some weight. If during debates about the Budget or PFI, we faced the prospect of having to take votes on raising a regional, Northern Ireland or Ulster rate of income tax, we would find that debates would be better attended.

I doubt if the House is ready to take on the responsibility of a regional income tax rate. What may happen in the medium-to-long term is a decision for the future. I support the motion because it is sensible to evaluate the full range of alternatives.

Joe Byrne (Social Democratic and Labour Party, West Tyrone)

I support the motion. It is good to open up the debate on attempts to get finance for capital investment project needs that are so starkly visible in Northern Ireland. We all recognise that there has been a severe lack of capital investment in infrastructure projects for 30 years. However, we should not get hung up on the ideology of PPPs or PFIs. When Lord Keynes introduced the idea of deficit budgets many years ago, it was intended that a society could borrow money from the private sector to finance capital investment projects in particular.

The public sector borrowing requirement (PSBR) is no longer in vogue; it is now the net cash requirement. Governments can still borrow money, but they borrow it from the private sector. In a small region such as Northern Ireland we cannot get as much extra public finance as we would through the Barnett formula, and we cannot continue to labour the point about how we are suffering from its inadequacies. However, sooner or later, the region will have to get a better picture of its public finance position. As I said on 25 September in a question to the Minister of Finance and Personnel, the sooner we see Northern Ireland’s revenue receipts the better. We will then have a better understanding of how public finances operate in Northern Ireland and how we are performing as a region.

Resource accounting is coming in. There is a massive notional charge being attributed to capital assets in each Department at the moment. If there is to be no direct public finance input into projects then there will be a charge and we should open up our minds to having value-for-money PPP projects. There have been some good projects in Northern Ireland — the Department of Education has endeavoured to lever in private funds for some projects that have not all been bad.

We must develop expertise in Government about how to manage the process of levering in private finance for particular capital investment projects; an area where there is a severe lack of knowledge in the British government system. This is the most important reason why trades unions and other established and respected bodies in the UK oppose PPP. Project management has not been good. There has been overcharging as far as some of the private finance levered in has been concerned.

Given our new dispensation we should open up our minds to levering in private finance. We should not get hung up about private finance being bad money. Virtually everyone who works has money tied up in a pension scheme. They are saving with assurance companies or in pension plans, and investment managers are looking for projects to invest money in. There is a large public sector in Northern Ireland and there are many people whose money is tied up in pension plans. Do we want that money to leave Northern Ireland and be invested in other places, or do we want it to be invested in capital investment needs and projects here?

We must accept the principle of using private finance in an efficient and effective way to rebuild the infrastructure that we need so badly. If we go on — in the same way that we have for the past 30 years — depending on the annual drip-feed subvention, we will slip further back and create even greater disadvantage.

I welcome the motion, but we should not close off any options at this stage. I hope that the Minister will put resources into an interdepartmental group that can look at alternative sources of finance that will help to regenerate and build our regional economy.

Dara O'Hagan (Sinn Féin, Upper Bann)

Go raibh maith agat, a LeasCheann Comhairle. Every Member and party agree that our public services are in crisis. It is not only our hospitals and schools; roads, railways and services across the board are in trouble. The Minister of Enterprise, Trade and Investment told the House today that the North of Ireland is heading into an economic crisis. Serious job losses were announced last week, and the Minister warned of more. We must break the cycle of depression and economic instability.

There is an onus on us to ask difficult questions and come up with big ideas. We must break the cycle of under-investment in public services that is a legacy of British involvement in our affairs. There are serious concerns about PFI. As Mr Byrne said, organisations and individuals across the board have reservations. The matter must be examined with regard to value for money, workers’ rights and accountability. Clearly, such concerns are well founded.

The purpose of the motion is to urge the Executive to look at alternatives. However, we do not have economic sovereignty, and that fundamental issue must be examined. We are subject to the financial resources and policy planning set out by the British Government. To date, our influence over the amount of money that we have to invest in public services has been sadly lacking.

The Barnett formula was mentioned, and it is clear that in the House and among political parties there is great unhappiness about that system of funding. We have failed to exert the necessary political pressure not only on the Barnett formula, but on tax-raising and tax-varying powers. We have focused on tinkering with rates and have toyed with other forms of back-door taxation. We are now in a position of crisis management across our essential services. We do not have the resources to plan for the future, or to look at those issues with imagination and vision.

There is a legacy of underfunding, discrimination, and, as a result of partition, of peripherality. Our need is not reflected in the headcount of the Barnett formula; our society is emerging from conflict. Where is the peace dividend that we were promised? We must demand, for example, that the British military expenditure be diverted and used instead to build on peace, and, in a sense, to create a period of economic reconstruction. The Irish Government should also be approached to ensure that their responsibilities in the North of Ireland extend to economic support and incorporation into the national development plan.

It is necessary to examine ways to develop our economic sovereignty. We must be allowed to borrow from such bodies as the European Investment Bank whose preferential rates would be much more favourable to the public sector than to the private sector. We must build upon the foundations of peace and conflict resolution. At present, the rules of the British Treasury do not allow us to do that. In European terms, that is highly unusual. It is an unwarranted and extremely tight restriction on the rights and economy of public bodies. There is no legitimate economic basis for it. I urge the Executive to take the matter up with the British Exchequer and at EU level.

We must also consider public bonds. That matter has not been explored with any great urgency. If the Assembly were able to sell bonds to the public a steady stream of income would be guaranteed. A significant amount could be raised for investment. An example of such an initiative is the London Underground, and there are others in Boston and in New York. There is concern that that approach amounts to regressive taxation, and indirect privatisation, but if it is handled properly it does not have to be like that. Such a scheme would ensure that capital investment projects remain under public ownership and management, and lower interest charges would result.

Why do we not look at public interest companies and genuinely independent trusts, instead of the compromised examples that we now have?

In regard to tax varying, we do not have the limited powers of the Scottish Assembly. We have the power to set the regional rate. However, we must recognise that that is not significant when compared to overall public expenditure. It represents a form of taxation that hits people unfairly. The British Government must live up to their responsibilities. To support a society that is emerging from conflict, they must ensure that there is a real peace dividend by recognising our need.

We must make progress in establishing economic sovereignty. We must have real control over the setting of our objectives and goals for public service expenditure and investment. That is where the solutions lie. Fundamental to all that are the constraints on economic sovereignty. It is key to movement on the issue. Go raibh maith agat.

John Gorman (UUP, North Down)

I was impressed by the fact that the Chairperson of the Finance and Personnel Committee had the initiative to start to look outside PFI. We must look at something new. We did it once. We took housing in Northern Ireland and sold it. Many people objected, and I am looking at people in the Chamber who in 1979 must have thought that it was a dreadful to sell a public asset to the private sector.

Northern Ireland was the first region in the United Kingdom to do such a thing. What was the result? Members can see the results all around them — housing is the one thing in Northern Ireland that is not controversial.

How was that achieved? It was achieved because people had a good, new idea. In fact, Mrs Thatcher had the idea originally, but it took her nearly two years to persuade the erstwhile Marxists, the soft socialists and the liberal do-not-change-anything people who were in Parliament then. However, she made it. We were lucky in that we had such an odd parliamentary system that we could go in one night to Westminster and say that we in Northern Ireland wanted to do that, and so for 18 months we had total freedom to sell the housing.

It meant that we had an asset that we could, through the excellence and initiative of the Minister then responsible for finance, make a case to the Treasury that was special and different for Northern Ireland. We were able to exhort the Treasury to pay some attention to the dreadful times that we had had with terrorism, the expenditure on security and the drain on all our functions and cash. The Treasury accepted that. Uniquely, Northern Ireland is the only place in the United Kingdom today that can sell its public housing and get all the money — not half in dribs and drabs — directly back. Councils are free to use the money.

PFI has happened once, so might it not be an idea to be a little bold and think of something new and different? It could happen if guns are given up, the Loyalists stop beating people up all night and the terrorism that ruins the country is given up for good. Imagine how the rest of the world would say "My God, that place is different and new. That is somewhere we should invest in." Instead of having to worry about whether public finances must be supplemented by private finances or vice versa, money would be flowing in. There is the challenge.

Mark Durkan (Social Democratic and Labour Party, Foyle)

Like other Members, I welcome the debate and I am happy to support the motion’s sentiments. I wish that more people had been present for the debate. I also wish that more people could have developed their points further, as I would have been interested to hear where some of their thoughts would have eventually led. Several Members said some intriguing things and provided key insights. Not all the points added up, but with limited time, not every point can be made or fully developed.

We have a fundamental need to identify alternative means and sources of funding in order to address the legacy of historical underfunding of the infrastructure of our public services, which was recognised in the debate. The deficit is estimated to reach at least £4billion in the next 10years, and it will probably be more. Many Members pointed out that that legacy of underfunding has meant some of our public services have required levels of capital investment far in excess of our available resources if we are to fund them in the traditional manner of public sector capital investment. That makes it important for the Executive and all Departments to explore new ways, such as public-private partnerships, to finance and to provide public services — I stress the words "public services". We can use new methods provided that they are affordable, deliver value for money, provide effective solutions to meet the public service needs, and add to the outcomes that we would otherwise have achieved.

It is also important that new methods are in accordance with the Executive’s wider social and economic objectives, and I accept the point that many Members made. We need to examine all options carefully and objectively and develop a clear policy in those areas. It is for that reason that the Executive made a commitment in the Programme for Government to review the opportunities for the use of private finance in all major service provision and in all major infrastructure projects by March2002. The aim is to increase investment and to provide innovative value-for-money solutions through public-private partnerships.

The high-level working group that MsLewsley and other Members referred to was established to carry out that review. It is jointly chaired by my Department and the Office of the First Minister and the Deputy First Minister. The group had its first meeting last Wednesday. I want to assure MrMolloy that, in its deliberations, the working group will take into account evidence from many quarters on the benefits and the constraints of using PPP. That evidence will include that found in the Committee for Finance and Personnel’s report. The report acknowledged that PPP can be a valuable tool and means of investment, while highlighting concerns about, and shortcomings of, aspects of certain PFI models. The members of the working group represent a wide range of interests and stakeholders from the public, private and voluntary sectors and, I hope, from the trade union sector also.

The Executive aim to ensure that policy in this area is developed using a social-partnership approach, and that was reflected in our invitations to a whole range of social partners to participate in the working group. We recognise that not everyone agrees with the concept of PPPs, and some people have particular concerns about their use. We will ensure that a broad cross-section of views is sought, and heard, during the course of this review through public consultation with all interested parties. Equally, we want to learn from the experience of others in this area — locally and internationally — so that we can be most effectively organised to develop policy and manage procurement of PPP’s where their use is appropriate in the public interest.

One of the working group’s first tasks has been to develop a working definition of PPP. I take issue with John Kelly’s assertion that PPP is simply another name for PFI. We are talking about a model that can have a much wider scope, a much more varied form, and, hopefully, a more effective and beneficial impact than the standard PFI models we have seen before. It is significant that the group will be trying to develop a working definition of what PPP actually means for our purposes in this part of the world. It is not a matter of taking a "karaoke" policy from elsewhere and singing along to it. We intend to develop our own practices and our own approach.

The group has been considering what forms of partnership are right for our public services, drawing on national and international experience. The group is asking what will work best in the context of our local, social and economic environment, and what forms of partnership generating increased investment funding for our public services can fit within our existing public expenditure control regime.

Some issues are unique to us, especially the equality dimension that several Members have emphasised, and we must take these into account in developing policy. The Executive are committed to ensuring that the working group will address all the relevant social and economic issues surrounding any future use of PPPs.

The motion asks the Executive to investigate alternatives. If there any other viable alternatives to the use of PPPs or the traditional means of public capital expenditure, the Executive will certainly welcome hearing about them and will readily try to follow them up. At this stage I can assure Members that nothing is being excluded. I made it clear when talking to the working group last week that nothing can be excluded. No option should be deemed to be taboo, nor should any means of securing better investment levels for our public services be deemed old hat.

It is not, therefore, a question of our saying that everything now has to be done by PFI or through the broader notion of public-private partnerships. As some Members said, we are trying to make sure that we can meet investment needs across the range of our programmes. We have to do so in the context of the deficits that we have inherited, and in ways that add up to more investment and that secure more public services at the standard people here have the right to expect. If, for doctrinaire purposes, we are to rule out the option of using private finance, then we will deny ourselves that opportunity. We will limit the scale of our impact in relation to public investment, and we will limit our opportunities to provide services of a modern standard in the sort of facilities that people have every right to expect.

Several Members did recognise that our present public expenditure control regime places certain limits on the ways open to us to raise additional funds for investment. That regime, whether we like it or not, is determined by the Treasury and not by us. It operates primarily on the basis of departmental expenditure limits. As has been said, direct borrowing or issuing of bonds by publicly funded bodies cannot, in fact, lead to any increased expenditure within the Northern Ireland block total. The effect of the departmental expenditure limit is to limit what we can spend in departmental terms. As some of my officials say, it does exactly what it says on the tin. Within those particular constraints, raising money through bonds will not actually raise the amount of money that we can spend or invest. Yes, we can raise money through bonds, but it will not add to the sum total of our effective expenditure. It will not actually add more investment.

I am not recommending or defending those particular rules, but we cannot simply wish them away. We have to recognise that bonds are a form of borrowing — they have to be financed by someone. In our circumstance the rules are clear. If we borrow, the full amount is deducted from our public expenditure block — we do not get the additional expenditure. It is not entirely true to say, as Dara O’Hagan did, that there is absolutely no legitimate economic reason for that. The fact is that borrowing absorbs savings, and it can only proceed if interest rates are attractive. If you have higher borrowing, you have higher interest rates, and that in turn suppresses private investment elsewhere and potentially damages growth. It is not the case that there is absolutely no possible economic reason or insight that might inform the Treasury’s view of those matters.

A lot of people in the House seem to think that it is just a case of our going and putting some of these ideas to the Treasury. They say "Just ask them, and when they say ‘No’, ask them whether they know who is asking and whether they know that we have had under-investment. Tell them that we are emerging from conflict." They think that the answer is suddenly going to change. We need a more persuasive case than that. That is why we have a working group to explore options and come up with models that can actually work — options that will allow us to talk to the Treasury, and others, about ways in which we can be more effective as we set about our business.

In focusing on PPPs we are trying to realise increased investment. Obviously, however, that has to be within the parameters of public expenditure limits.

I make no apologies as Finance Minister. I am in favour of public spending, and I do not try to reduce the amount of public expenditure or the Northern Ireland block. I want to find ways to increase investment and modernise our public services to meet the needs of the whole community.

That is why I agree with Members who want to try to improve on the Barnett formula. However, I caution Members to be realistic. It is not just there for the asking; we face difficult challenges as well. And let us remember, there are people elsewhere who want to change the Barnett formula, and not to Northern Ireland’s advantage.

We need to look hard at the needs and effectiveness evaluation that is under way, and we have to be prepared to press the Treasury on the point in that evaluation which shows that we need added consideration and added expenditure if we are to meet our relatively greater needs. We have to be open so that we can accept that there may be areas in which our traditional spending is higher than the capital spending across the water. We may need to revise some of our spending tendencies downwards.

We have to be open to the possibility that some of the important investment in services in the recent past will allow us to put less emphasis on continued spending on them. It is possible to invest more heavily in programmes that are most under pressure, in particular health, schools, roads and transport.

The Executive is not interested in using PPPs to cut public services or public expenditure. We are trying to explore PPPs — possibly multi-sectoral partnerships. I discussed that with the high-level working group, because there are partnership models and experiences in Northern Ireland that we can recruit in order to expand and widen some notions of PPP. We have some cross- sectoral partnership experiences that go further than partnership experiences in other jurisdictions. Let us recruit those experiences to some of the financial public- private partnership experiences that we have elsewhere. That is one reason for having such a broadly based working group.

We do not wish to use public-private partnership as some form of privatisation. The aim is to ensure that we maximise our public investment. If we know that we need more infrastructure or investment in modern quality facilities to enable members of the public to avail themselves of better public services, we need more investment. If we want to start more projects but are limited in the number of starts we can make by the traditional route of public capital investment, we have to look at ways of marshalling private resources so that we can start more of those much-needed capital projects.

Some Members made reference to some old-style socialist tendencies that may lurk in some quarters in the Chamber. Northern Ireland does not have a command economy, but there are devices available to us with which we can marshall private finance and private-sector activity. We will never have well-developed public-private partnerships unless we use the capacity of the private sector to support public investment needs and the enhancement and provision of public services. We are talking about public services here.

We must remember that PPP transactions and workers’ rights are governed by legislation, including EU legislation on the transfer of undertakings, and those obligations stand and apply in that instance. We must explore all the alternatives that we can, because as this debate has shown, there is no shortage of need. There is no shortage of good projects on which we can spend good money. We must ensure that we get good money as readily as possible.

If we had a fair wind with the Treasury and were able to change the allocation of funding through the Barnett formula, and if we were also able to secure a further dispensation from the Treasury allowing us to use some form of bond, we would still need to supplement the expenditure achievable through those means with PPP. We would still have to use our experience of good PFI in some of those projects where it is suitable.

I hope that Members’ thoughts on this matter will converge. Some among us have argued that the problem in seeking alternatives is that we have not sought tax- varying powers. The unusual suggestion has been made that we access tax-varying powers but not tax-raising powers as a means of raising more money. In other words, not only are we to ask the Treasury to give us more money in circumstances where we would not ask for more money from our own households, but less tax is to be exacted at the same time. I do not care how persuasive or persistent anyone in the House is going to be; we are not going to get far on that basis with the Treasury.

If we indeed need investment that many Members have termed "vital", is it so vital that we will face the hard choice of trying to raise the money ourselves from within our regional resources through the means available to us? Will people believe that we are seeking tax- varying powers and that we are going to be hard-headed and realistic about the exercise of tax-varying powers, when we are afraid of the one tax instrument that we currently have — the regional rate? We are raising it very little compared to household contributions across the water. I do not mention that in order to threaten that we need to double household contributions through rates, but rather to simply introduce a reality check into our consideration.

We were given some examples of the use of bonds; I am not against bonds. We must work to develop a system that includes a bond facility workable within Treasury rules, which will have the attractions in broader market terms, locally and internationally, that Members have mentioned.

Many of those bonds that people cited as examples — those used in the London Underground and in some American cities — do not just allow us to raise money. Dr Dara O’Hagan said that if we had bonds, we could raise money. With bonds, we also must pay the money back. Payments must be made on those bonds. How are those payments to be funded? Where does the revenue come from? Will our public expenditure just go to pay back those bonds? That would propel us back into the hire purchase argument that people have used against PFI.

Many of the examples where bonds have either been used or proposed involve projects where user charges generate high revenue. The same people who seem to be advocating some of these models have told us that we are not allowed to go down the road of charges, just as we are not allowed to explore further increases on rates. I am all in favour of exploring alternatives. That is what we are about, and the working group has a wider remit than just trying to revamp PFI. That is why we want to involve our social partners.

Jane Morrice (NIWC, North Down)

Will the Minister bring his remarks to a close?

Mark Durkan (Social Democratic and Labour Party, Foyle)

Let us remember that alternatives are not all going to be easy alternatives, and they are not going to be soft options for the Assembly. Equally, there will be no soft money from the Assembly — any more than there will be soft money from the private sector.

Francie Molloy (Sinn Féin, Mid Ulster)

Go raibh maith agat, a LeasCheann Comhairle. I thank the Minister for attending the debate and for giving a very comprehensive reply. I will not deal with all of the issues he mentioned; there were so many. However, the debate has been successful in raising the issues and getting people to think about alternatives. I was glad to hear the Minister say that the working group is not just dealing with the implementation of PFI, but also looking at alternatives.

When it comes to tax-varying versus rates, it is about looking at alternatives and not about taxing households to the hilt. I will deal with a point raised by Esmond Birnie. I was not being specific with respect to a tax; I was saying that we should look at tax-varying and how we can have a fairer system of taxation. Simply increasing the rates is not the way to do it. I do not see tax-varying as a tax-raising power. We should not increase income tax or any other tax; we should look at taxation in general.

I remember listening to Esmond Birnie in Enniskillen some years ago, when he was saying that the South of Ireland was not economically viable and that it could not afford to be an all-Ireland republic. Esmond got it wrong that time and maybe he has got it wrong this time as well.

The debate is about PFI and alternatives. It is important that we look at all of the alternatives and rule none of them out. The Committee for Finance and Personnel held an inquiry into PFI, and proved that in some cases it was successful, but in others it was not. In some situations bonds may be successful. The difference between bonds and PFI is that bonds give you the finances, and you then decide how to use them. With PFI, you are giving someone a contract. There are benefits in some contracts if they are properly negotiated and carried out. The problem in the past has been that some contracts were not properly negotiated and carried out, and proper contract maintenance was not tied into them. We must look at that issue.

We should have alternatives so that our hands are not tied. If we are going to negotiate with the private sector as regards funding, and if we are saying at the same time that we do not have any alternative but to give them the contracts, then surely we are tying our hands in relation to those contracts. They can charge us whatever they want.

While there were not many Members in the Chamber, quite a few of those who were spoke on this issue. I am thankful that all parties discussed it. John Gorman spoke about housing. That is an important factor, and we recognise the impact that the Housing Executive has had in trying to alleviate homelessness and the problems associated with that. However, in dealing with the broader political scheme, he must recognise that the Housing Executive was set up because of discrimination in the past by the Unionist regime in Stormont. Control of housing had to be taken away from local councils and Stormont so that houses could be allocated fairly — something that had not happened in the past. Unionists are now proposing to bring the Assembly down because it is not the same as the old Assembly, or the old Stormont, and they are not getting their own way on every issue.

The Minister said very clearly that the Programme for Government, and the possibilities in that programme, are underpinned by PFI. A marker has been put down. Within the present context, and until the working group reports, no alternatives to PFI are being looked at. I am concerned that in agreeing PFI contracts we do not tie our hands for the future, or tie up funds.

I speak as a private Member in this debate, and not as Chairperson of the Committee for Finance and Personnel. When James Leslie raised the issue of the use of bonds, he spoke in the same capacity, and not as Deputy Chairperson of that Committee. We accept that, at the end of the day, the taxpayer will have to pay. There is no way to circumvent that. There is no way to build schools, hospitals et cetera unless somebody pays. How we pay, and the freedom that we are given to put the contracts together, may decide whether we choose PFI, bonds or other methods. We could use tax-varying powers, or we could borrow from the European bank or some other source. We do not have economic sovereignty at present; we are dependent both on what the Exchequer decides and on what comes out of the Barnett formula.

Ms Lewsley defended the Minister, which she is entitled to do. However, we have to look at the issue. I am not here to decry the role of the Minister. He has been very open in his discussions with the Committee and with Members. This is not a competition; one of the benefits of the debate is that all parties have come together to support movement on the matter.

I acknowledge the remarks made by Mr Dodds. He pointed to the fact that we should not tie our hands, but should be open to all alternatives. John Kelly mentioned trade union concerns. The Committee picked up on that in its inquiry. There was concern that people who had been guaranteed protection in their new employment under PFI did not receive that protection. Many people felt left out and worse off because of that.

The Minister said that PFI is not simply privatisation, which I accept. However, baggage from the past means that a danger remains that PFI may simply be seen to mean privatisation. We do not have to imitate what happened in the past. I welcome the fact that we now say that whatever is devised will be home-grown, it will suit the situation and we shall be responsible for it.

Mr Byrne raised the issue of pension funds. Many of the people who put those contracts together come from a pension-fund management background. We heard at the inquiry in England that housing associations and developers have put up money in various ways. We need to look at all the alternatives, and we can do that in our own way. There is unanimous agreement, as Dr O’Hagan said, that we do not have the public services that we require. A number of them are deficient, not just financially, but historically.

From today, we can progress and continue the discussion on the use of public-private finance. Last Monday, Sir Reg Empey and Séamus Mallon came to the House with a clear line on the Programme for Government and its aspirations. The next day, the Minister for Finance and Personnel told us what was feasible and what was not, and what could or could not be delivered.

I would prefer that the situation were made clear than that we should have a pie-in-the-sky Programme for Government that we know cannot be delivered. The Minister made clear what was required, and we can work in that context.

There is a simple argument about the legacy of past underfunding. We must look to the British Government to pay for that underfunding. Some people may dismiss that idea and say that we will not get such payment. However, if we do not set the marker high enough, we will get less than we deserve. We must emphasise to the British Government that, in recent years and even in the lifetime of this Assembly, other regions negotiated for — and received — allocations that were over and above their Barnett formula entitlement, while we did not get sufficient to meet our need. The Health Service is one example: England, Scotland and Wales received sizeable amounts of money, but we lost out because of the Barnett formula. The need here for resources for the Health Service is as great as — if not greater than — that in other areas. We must make that argument as strongly as possible.

I thank Members for their participation in the debate and ask them to continue to raise the issue in their Departments and Committees. All of us on the departmental Committees have a vital role to play in raising the issue and starting a debate about PFI and alternatives to it. Go raibh maith agat.

Question put and agreed to.

Resolved:

That this Assembly calls on the Executive to investigate and promote alternatives to Private Finance Initiatives/Public Private Partnerships as a means of funding capital investment.

Adjourned at 7.23 pm.