Lord Caine

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That the Bill be now read a second time.

The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Caine) (Con)

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My Lords, before I turn to the Bill, I pay tribute to Peter Brooke, Lord Brooke of Sutton Mandeville, Secretary of State for Northern Ireland from 1989 to 1992, who sadly passed away this week. I had the immense privilege of being Peter’s special adviser in the months before the 1992 general election and supported him before that as the Northern Ireland desk officer in the Conservative Research Department. He was, as has been pointed out, a man of profound personal integrity, learned, witty and unfailingly polite and courteous. Peter served as Secretary of State while the Troubles were still raging and—we should never forget—around 100 people a year were losing their lives as a result of the security situation. He cared deeply about Northern Ireland and, with infinite patience and determination, sought a better, more peaceful and stable future for all its people. His huge role in the origins of what became the peace process should never be underestimated. I am sure that I speak for everyone in the House in sending our sincere condolences to his widow Lindsay and the Brooke family at this difficult time.

I turn now to the Bill itself. It is, of course, with profound regret that I return once again to this Dispatch Box to bring forward legislation in the absence of a Northern Ireland Executive. I am certain that noble Lords across the House will agree that this is not a position in which any of us would wish to find ourselves. In line with our steadfast commitment to the 1998 Belfast agreement, His Majesty’s Government remain committed to supporting the restoration of the Executive in Northern Ireland as soon as possible. In our view, a strong devolved Government, with elected representatives from across the community working together, is the surest foundation for the governance of Northern Ireland within our United Kingdom and the best outcome for all its people.

Last month, many of us came together, including Members of your Lordships’ House—including the noble Lord, Lord Murphy of Torfaen, on the Bench opposite—to reflect on the 25th anniversary of the Belfast agreement. We marked the progress that Northern Ireland has made over the past quarter of a century and the relative peace and prosperity that the agreement has brought. This anniversary remains an opportunity for all of us to recommit to building an even brighter future for Northern Ireland. Now is the time to decide how we want to move forward together, to create a better future for and deliver on the priorities of the people of Northern Ireland. That includes a more prosperous economy and better, more sustainable public finances and services.

On that note, and before I provide an overview of the Bill, I will say a few words on Northern Ireland’s public finances. As the provisions of the Bill will indicate, we are acutely concerned about the long-term stability of public finances in Northern Ireland. It was with considerable disappointment that, in the absence of devolved government, my right honourable friend the Secretary of State for Northern Ireland found it necessary, once again, to intervene and set a budget for 2023-24. I set out that budget in a Written Statement to your Lordships’ House on 27 April. As he has made clear on multiple occasions, the extent of the budget pressures facing Northern Ireland departments is, to put it mildly, extremely challenging. Departments are facing difficult decisions in the current circumstances. The Government recognise that, and it is one of the overriding reasons why we need an Executive in place to take some of these decisions and make choices on budget priorities.

As the UK Government, we stand ready to work with a restored Executive on these issues but, in the meantime, we have a responsibility to ensure that public services and management of public funds can continue. We will, in due course, introduce legislation that will put that budget on to a legal footing, if the Executive are not restored to do so. Members of your Lordships’ House will have the opportunity to debate in more detail those allocations if and when we have to introduce that legislation.

Today, though, I will focus on the Bill and its provisions. The Bill is of course a short one and I will seek to be brief in recognition of that. I once again express my sincere thanks to the Benches opposite for their continued co-operation as the Government seek to bring the Bill forward at the requisite pace. I am particularly grateful to the noble Lord, Lord Murphy of Torfaen, and the noble Baroness, Lady Suttie, for the constructive manner in which they and others intend to approach this legislation.

The Bill does three important things. First, it continues the provisions relating to decision-making for Northern Ireland civil servants which Parliament passed last December through the Northern Ireland (Executive Formation etc) Act 2022. These provisions, which clarified the decisions that civil servants in Northern Ireland departments can take in the absence of Northern Ireland Ministers and an Executive, are due to expire on 5 June. Through the Bill, these powers will continue until the Executive are reformed. That will avoid a governance gap arising if an Executive are not in place by 5 June. As before, senior officers will be required to have regard to guidance issued by the Secretary of State; the Government published an updated draft of that guidance on 10 May. We would, of course, welcome any representations that noble Lords or others may have on that guidance before we finalise it.

The second main provision of the Bill—and the more novel provision in this legislation compared with previous Bills—is to provide for new powers for the Secretary of State to explore, with Northern Ireland departments, options for budget sustainability including further revenue raising in Northern Ireland. Alongside commissioning advice, the Bill will allow the Secretary of State to direct consultations to be held by Northern Ireland departments on those matters. These powers are, again, time limited and will apply only until an Executive are formed. These measures are deliberately focused on official advice and consultations on budget sustainability. Final decisions on any implementation are best taken by locally elected representatives; the Bill does not give the Secretary of State any power to direct implementation of any such measures.

Finally, the third thing that the Bill does is to ensure greater political oversight of the management of public money in the absence of the Northern Ireland Assembly. The Bill does that by providing for Northern Ireland department accounts and associated documents to be laid in the House of Commons, in the absence of the Assembly. In previous absences of the Northern Ireland Assembly, the law has provided for that scrutiny to fall to Parliament, and the provision in the Bill will do that again. This provision will be active only for this and any future periods where there is no functioning Assembly, on the basis that public bodies must always be scrutinised for their good management of public money.

In conclusion, the measures in the Bill will ensure a continuation of the current governance arrangements in Northern Ireland, should there be no Executive when they expire next month. However, these measures are not, and cannot be, a substitute for devolved government in Northern Ireland. We acknowledge that the current arrangements are by no means desirable—to put it mildly—particularly in the context of Northern Ireland’s difficult financial position. I also recognise that the Bill is not a long-term solution to the wider issues with which Northern Ireland is grappling: they are matters for a newly reconstituted Executive and Assembly to address. The marking of the 25th anniversary of the Belfast agreement has reminded us all of the importance of making the institutions in Northern Ireland work, and work for the entire community. His Majesty’s Government believes that having an effective and functioning devolved Government is crucial to showing that the union itself works for the whole community in Northern Ireland. That is why the restoration of the Executive remains our top government priority in Northern Ireland. We will continue to do everything that we can to make that happen in as short a timeframe as possible and, as we do that, we will keep these arrangements under review. For now, I commend the Bill to the House.

Lord Morrow (DUP)

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My Lords, we certainly agree with the Minister when he says that it is regrettable that the Northern Ireland Assembly is not up and operating—but we all know perfectly well why. My party gave much notice—in fact, I think that we gave 13 months’ notice—in this House and elsewhere that the Northern Ireland Assembly and Executive were on life support. Now the whole thing has collapsed due to these red lanes, green lanes and border controls. We are no longer strictly a part of the United Kingdom in the same sense as Scotland and Wales.

But the main point I want to make today pertains to Clause 2 in relation to advice and information on options for raising public revenue. The Government are right to be alive to the fact that Northern Ireland needs more public revenue, but the implication of this is that the way forward is through local means. That, however, is to distract attention from the key point at issue. On 2 May, the Northern Ireland Fiscal Council published a report that uses the Holtham formula to calculate what needs to be spent in Northern Ireland in order for needs to be met on the same basis as they are in England. Crucially, the Holtham formula for defining need per head of population is not a random assertion but the result of a government commission that the UK Government have already accepted for Wales, Scotland and Northern Ireland.

Using the formula, the Fiscal Council demonstrated that in order for needs to be met in Northern Ireland on the same basis as England, Northern Ireland needs to receive £124 per head. Crucially, however, the Treasury block grant transparency document shows that spending per head in Northern Ireland for the spending review period of 2022 to 2025 is £121 per head. It is, therefore, no surprise that Northern Ireland is currently in the midst of a very serious funding crisis, with Stormont departments having to make cuts right, left and centre. Today, Northern Ireland is the only part of the UK to be in receipt of below-needs block grant funding. Northern Ireland thus finds itself in a similar position to Wales in 2009-10, but, rather than just being £1 below need for one year, Northern Ireland is £3 below, and not just for this financial year but for the last financial year and for the next financial year.

If we extrapolate for the three-year funding review period, the Fiscal Council report demonstrates that we are currently underfunded to the tune of just over £1.2 billion. The critical point in all this is that after Wales went below need for funding in 2009-10, the UK Government responded in a way that established three critical precedents. First, they accepted the Holtham formula as a definition of need. Secondly, they introduced a 5% transitional needs adjustment for Wales, whose purpose it is to slow down the Barnett squeeze up until reaching the Holtham formula definition of need. This applies when funding per head has not fallen below need. Thirdly, it introduced a Barnett floor for Wales on the basis of the Holtham formula definition of need to introduce a complete needs adjustment at the point where funding per head reaches need and threatens to go below.

In making that arrangement, the UK Government have agreed that it would be wrong for funding per head ever to fall below need, and made provision to prevent this ever happening again. The Government are now duty bound to afford the people of Northern Ireland the same courtesy. As we have already fallen below need, this should result in a full needs adjustment backdated to the beginning of the spending review period. In recent weeks, the Government have sought to press the DUP back into government in various ways. I ask that they reflect very carefully about the implications of trying to use the current funding crisis as a means of doing so. The reason we had to withdraw from Stormont is that we were not prepared to settle for, and thus effectively cement in, a second-class citizenship in which we no longer have the right to stand for election to make the laws to which we are subject and in which we are forced to be presented to the rest of our home economy as if we are a foreign country. I do not think it would reflect well on the Government to do that and I do not think it would be wise.

Finally, in the normal sense of events there would be an opportunity to ask the Minister for a meeting between Committee and Report to discuss the need for a comparable Barnett floor provision for Northern Ireland to that which exists in Wales. However, there will be no time between Committee and Report, as all remaining stages are to be taken on one day, so I will take this opportunity of asking for such a meeting to discuss this ahead of the remaining stages.

Lord Bew (CB)

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My Lords, I support the Bill, but I want briefly to echo the words of the Minister on Lord Brooke and the major contribution he made to the affairs of Northern Ireland as part of the United Kingdom.

There is no alternative at this moment to the appearance of the Bill, which I think I can say safely that the whole House regrets. I welcome the fact that the Northern Ireland Affairs Select Committee in the other place is taking a closer look at the general question of Northern Ireland funding and the longer-term problems of the financing of Northern Ireland. I note with great interest the point made by the noble Lord, Lord Morrow, that there may be lessons to learn from Wales: I think we should listen carefully to what he said on that.

As I said, there is no alternative at this moment, but of course there could be an alternative in quite quick order if the DUP were to take up its share of the co-premiership of Northern Ireland. Our briefing note from the Library is absolutely excellent—it is of very high quality—but it refers to the DUP taking up the deputy premiership as if it were, like the deputy premiership in the other place, a subordinate position, whereas of course Northern Ireland is a co-premiership and it is worth just making the point that the DUP would have half a share of the co-premiership were it to take up that position. Indeed, I remind the House that, on the basis of its previous work in this respect, it actually delivered 10 years of stability to Northern Ireland—something that is all too casually forgotten.

I conclude by briefly referring to the words of the Foreign Secretary at the Select Committee of the noble Lord, Lord Jay, on the working of the protocol. That committee, which has done important work, will soon, I hope, be the Select Committee on the Working of the Windsor Framework. The Foreign Secretary stressed the way in which, if the DUP returned to government, it would not lose agency, it would actually gain agency. At this point, it is a passive spectator with respect to realities which, however objectionable, are actually not going to change.

It is worth remembering that we are on a road and on a process. The Theresa May iteration of the withdrawal agreement that arrived in this House contained absolutely no reference to the existence of the Northern Ireland Assembly. The Johnson iteration changed that, and it has been changed much more again by the new Windsor Framework. It is perfectly clear that the role of the Northern Ireland Assembly going forward in handling the relationship of these tricky problems—and they are tricky problems, to which there is no perfect solution—is now considerably enhanced. Parliament as a whole has moved very substantially on what is called the democratic deficit: indeed, the committee of the noble Lord, Lord Jay, has laid a lot of emphasis on that.

I remind the House that the brake which has been introduced in the new arrangement is a new development. It is increasingly clear, from listening carefully to the debates, that it is not disputed on any side that it is of significance. There is an argument, given the totality of developments, about how important it is, but there is no argument any more about its specific effectiveness, on either side. That is one of the few points of clarity in what I think has been a very confused debate in Northern Ireland which has not focused enough on the exact details of what has been before the people of Northern Ireland over the last few weeks; it has become increasingly clear.

I draw brief attention to the unilateral declaration by the UK Government on the democratic consent mechanism in Article 18, posted on 24 March of this year on the EU website and noted by the EU. This again raises a whole space for political play in dealing with the possible difficulties that might well arise. Of course, ultimately there is a simple reality. As Lord Trimble did twice, with my total support, if it turns out that undertakings have been given—for example, the apparent undertakings in the very important White Paper the Government have laid out—and if the DUP enters the Executive and it turns out that the undertakings, or the apparent basis on which the DUP is entering, are not correct, there is the option of actually withdrawing again. Nobody can dispute this. Lord Trimble effectively did it twice. It is not very nice and I would deeply regret seeing it happen. I deeply regretted it being done twice in a different era, but it was actually the right thing to do and it sustained the process in the end. But it is indisputably an option.

So the alternatives are either to be a passive recipient of things that cannot be changed or to engage in genuine political debate about the future.

Baroness Hoey (Non-Afl)

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My Lords, the Minister said it was with profound regret that he was bringing forward this Bill; I think we all share that sentiment. I do not want to repeat what the noble Lord, Lord Morrow, said, but it is important that we remind ourselves why we are here: we are here because the United Kingdom Government decided that Northern Ireland could be treated differently, and our citizenship is being eroded in many ways. The internal market has gone and all the hype about the Windsor protocol, as I would call it, is being exposed more and more. Therefore, we are here through the Government’s own making, and because they are not committing to the whole of the United Kingdom leaving the European Union—which was what was on our ballot paper in Northern Ireland as well.

Of course, we have to go ahead with this Bill; it is important. However, I think we should also remind ourselves that the 1998 devolution process, which we have been commemorating recently, is inherently unstable. It may have enhanced peace, yet there have been over 150 terrorist murders in that period, mostly killings between terrorist groups and each other. None were caused by the state, although around five involved the deaths of security force and prison staff. You could be forgiven for thinking otherwise, given the ceaseless list of 1970s legacy cases going through the courts in Belfast—every week there is another one—all of which are trying to rewrite history by reallocating blame for killings from the IRA to some element of state forces. It is really important that your Lordships realise and remember that.

A working Executive could do various things. They could agree on dividing up the money from the block grant. However, as we know in this House, any issues which require the two communities to yield on their particular hard and fast views mean we in Parliament end up legislating time after time: on legacy, abortion, gay rights or welfare reform—anything that is really controversial ends up here. We need to remember that as well.

The 1998 consociational structure means that Stormont operates on two tracks that do not meet. Local government works because it operates more on a committee system that cannot be boycotted easily. We see, and it is quite sad, that the Government, having changed the date of the local council elections to today, then put Northern Ireland legislation on the agenda for today. My personal view is that we should be strengthening local government in Northern Ireland, increasing the numbers of Members of Parliament, and doing away with and abolishing the whole Stormont set-up.

The current Secretary of State will not remember it, unlike the Minister, but when David Trimble twice pulled down the Executive over decommissioning, or the lack of it, he experienced the same wave of outrage that we hear in the media in Northern Ireland about what is not happening and Stormont not sitting. Today that rage is compounded by the strategic budget cuts. I believe that Northern Ireland needs the same focus on the Barnett formula, and how it works, that Wales got—it really is time for that. People in Northern Ireland are not stupid. They know that some 98% of government spending in Northern Ireland will proceed, regardless of whether Stormont is sitting or not. The financial situation is dire, and of course some of that happened under Stormont. The Sinn Féin Finance Minister could not get his budget through Stormont, so the idea that if we all get back to Stormont tomorrow the finances would be sorted is rather silly.

We have a legislative lockdown, but with only the minimum of law changes needed to keep the show on the road and to stop the lack of money supply actually wrecking sections of the economy. However, I feel the Secretary of State has perhaps decided that punishing the Northern Ireland people is the way to get devolved government back. We have seen senior civil servants—who I am sure are taking soundings from government Ministers—choose the most conspicuous cuts, such as this week’s cut to nurse-training funding, to frighten the public. I am sure this is being given the green light by certain people in certain positions. That health cut is going to inflict a major workforce shortfall in three years’ time, when those nurses who should have been graduating and entering the local profession will not do so—and of course there is a huge shortage of trained nurses in Northern Ireland and Great Britain.

There is some common sense in the Bill. Clause 2 gives powers for the Secretary of State to direct departments to provide advice or information, and even to oblige them to carry out a consultation. There might be a seed of a possible return to what I think would be a more sensible solution, and that would be a form of direct rule.

I know the noble Lord, Lord Murphy, on the Front Bench, will probably have a different view, but I think the Orders in Council system could have been a better way. We are going to find it extremely difficult to get Stormont set up and working well. It is time we started to think about that and to realise that Northern Ireland does need the direct attention of this place, and not treat devolution as some way of getting rid of it. We need to remember that while we have the Windsor protocol we will not have devolution.

Lord Rogan (UUP)

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My Lords, I share the regret expressed by the Minister and other Members that we are discussing this Bill today. It is deeply unfortunate that this legislation is necessary. However, rather than repeat the argument about how we got here—I am no fan of either the Northern Ireland protocol or the Windsor Framework—I wish to concentrate my remarks on the perilous financial position the people of the Province now find themselves in.

His Majesty’s Government have committed to bring forward a separate Bill to put the draft budget recently set by the Secretary of State for Northern Ireland on the statute book. That budget could have been part of the Bill before us today, but I am pleased it is not because it at least holds open the possibility of a change of approach from Mr Heaton-Harris.

I know the Secretary of State is a fan of sport, and indeed a qualified football referee. However, I do not know if he is a poker player. If he is, I would not expect him to be a particularly successful one. It is perfectly obvious to see what he is attempting to achieve, both by publishing his draft budget and by his comments surrounding its content.

To be fair to Mr Heaton-Harris, I understand his frustration at the lack of a functioning Executive and Assembly at Stormont. It is a frustration held by a great number of people in Northern Ireland, albeit for an assortment of different reasons. However, I do not believe it is right for him to place such fear and worry in the minds of so many individuals, families and organisations across the Province because of the failure of politicians in Belfast and London, and indeed Dublin.

According to the Northern Ireland Fiscal Council, Stormont departments—now run solely by unelected civil servants—will be expected to find £800 million in cuts and revenue-raising measures as a result of what has become known locally as the “punishment budget”. The fiscal council calculates that the draft budget amounts to a reduction of some 3.3% in real terms this year. That is a much harsher cut than that faced by Whitehall departments, which have been handed a 0.7% real-terms budgetary reduction.

In education—I declare an interest as my wife is a retired principal of a leading primary school in south Belfast—schools in Northern Ireland are facing a 2.7% cut in funding. In contrast, the budget for schools in England is due to rise by 6.5%. I fail to see how that is in any way justifiable, particularly in the wake of the pandemic and the challenges pupils in Northern Ireland, as indeed elsewhere, have had to face.

There are other areas of grave concern for me regarding the Government’s planned budget cuts, but I will highlight just two. First, on policing, speaking at the end of last month, Assistant Chief Constable Bobby Singleton told the BBC that the PSNI expected to be hit by a budget cut of £150 million. He said this figure was based on indications he had been given by the Department of Justice, which, as the Minister confirmed to me in a recent Written Answer, is responsible for its funding. Given the recent and thankfully failed attempt by dissident republicans to murder DCI John Caldwell, and the increase in the terrorist threat in Northern Ireland from “substantial” to “severe”—a decision taken by MI5, independent of Ministers—I believe the cut to PSNI funding is particularly ill-advised and a reckless path to tread.

His Majesty’s Government have had few achievements to proclaim over the past few months, but one has been meeting their target of recruiting 20,000 additional police officers in England and Wales since 2019. Meanwhile, earlier this year in Northern Ireland, the chief constable announced plans to reduce numbers by 6% to just 6,700 officers, making it the smallest force it has ever been. Given the ongoing terrorist threat and the time it takes to train new officers, that is an appalling state of affairs which is neither acceptable nor sustainable.

I also want to speak about health. Here in England, barely a day goes past without another story in the media about the dire state of NHS waiting lists, but waiting lists in Northern Ireland are by far the worst in the entire United Kingdom. In figures released in March, 122,267 Northern Ireland patients were on waiting lists in the in-patient and day case categories, with 66,302 waiting a year or more for their surgeries. Further, 6,000 had been waiting for five years or more—long before the world had even heard of Covid-19. Yet, in the Secretary of State’s draft budget, NHS funding in the Province is due to rise by a mere 0.5%, far below the increased amounts for health in Great Britain.

I also have deep concerns about the problems faced by community pharmacies in Northern Ireland, many of which are struggling to stay afloat because of a range of problems, including the Northern Ireland drug tariff and the delayed implementation of the community pharmacy commissioning plan for Northern Ireland. Rather than go into the intricacies of the situation on the Floor of the House, I politely ask the Minister to meet with me and representatives of community pharmacies in the Province to hear their concerns directly. I hope that is an invitation he will accept.

Finally, today is local elections polling day in Northern Ireland. As politicians, we are more aware than most that it should be a day of excitement and hope for a better future. However, given the political vacuum people in the Province have found themselves in once again, there is no sense of optimism. Local voters face the prospect of a continuing absence of accountable political leadership, a seemingly endless stream of funding cuts to key services and little prospect of respite any time soon. Even the levelling up fund, which many local community groups and sports clubs were hoping would enable them to do something positive for their areas, allocated only a minimal amount for Northern Ireland in round 2 and left numerous applicants significantly out of pocket because of the expense of putting together their professional bids.

The Bill is before us today because His Majesty’s Government were left with few other options. However, if and when a budget Bill is brought forward, I hope Ministers, including the Prime Minister, will have the foresight and wisdom to look again at the figures, particularly in relation to health, education and policing. I accept the need to reform how Stormont operates, but in the depths of a cost of living crisis I appeal to the Government to do the right thing by protecting the people of Northern Ireland from the perils that the current draft budget graphically exposes them to.

Lord Robathan (Con)

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My Lords, I shall not detain the House long nor repeat everything that has already been said, because it would be quite unnecessary. I have great respect for the noble Lord, Lord Bew, and I agree entirely with what he said: there is no alternative to this legislation. That is unfortunate but true.

I think this is the first occasion on which we have debated Northern Ireland business since the death of Lord Carswell, a former Lord Chief Justice of Northern Ireland. I raise his death and pay tribute to him because I remember being here during the Brexit debates, which were long, monotonous and varied, when he spoke about his childhood in Belfast and how he could bicycle down from Belfast to Dublin and never saw a border or a border guard. That was in his lifetime. We talked a lot of nonsense about how there might be a hard border in Northern Ireland, but there has never been a hard border across the island of Ireland. Friends of mine spent many years trying to stop illegal border crossings, mostly smuggling and terrorist-related, across the internal border, and they completely failed.

One should remember what Lord Carswell said because this is partly behind the whole issue about the Windsor Framework. My view is that the Windsor Framework is flawed but it is the best deal we will get. In addition, we live in the art of the possible; that is what the Windsor Framework is. In politics, much as we might wish to, we do not always get our own way on everything. I deprecate the fact that the European Union should have anything to do with a sovereign part of the United Kingdom, but that is the situation we are in.

To move on slightly to the broader issue, I very much deprecate the fact that Sinn Féin is the largest party in the Assembly now—or it would be if the Assembly was sitting. I hate it. Sinn Féin was always described as the political wing of the IRA, and I think it still is. Because of that, it sticks in my craw that anybody should vote for Sinn Féin, although a lot of very decent people do. The IRA is now somewhat romanticised in Northern Ireland, but in fact it is a bunch of ghastly, murderous thugs, and we should remember that—starting with Gerry Adams, who, not in this world but perhaps in the next, should answer for the deaths of people such as Jean McConville. However, I say to my fellow unionists that we live in the world as it is and we are in the art of the possible.

I will not digress too far, but after 1997, many people in the Conservative Party wished to go back and say, “Why didn’t these stupid people, the electorate, vote for us?” Finally, however, we worked out that you do not blame the electorate—you blame yourselves for why people do not vote for you. I say to my fellow unionists, we have to change. The world changes; we all have to change—unbelievably, I am less hard-line than I was. I say to my fellow unionists that we need political leadership to understand how to get the electorate’s confidence back, and political leadership to go back into the Assembly so that we have an Executive in Northern Ireland. For all its defects, that is the best way forward.

Viscount Stansgate (Lab)

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My Lords, it is a pleasure to follow the noble Lord, and I am grateful for the opportunity to speak in the gap and make one point, which is about the relationship of science to the Bill. I begin by associating myself with the remarks of the noble Lord, Lord Caine, about Lord Brooke. It is right that his contribution and the work he did over many years is acknowledged in a debate of this kind.

Science, and the science community in Northern Ireland, needs an Assembly as much as any other community. Much excellent work is done on science in Northern Ireland, as well as elsewhere in the UK. It was no coincidence that on the recent visit of the President of the United States, he went to the University of Ulster to open the new premises, because good work is done in Ulster, as well as elsewhere.

I have reason to share the view of the scientific community that it needs a working Assembly. For many years, in a former capacity, with colleagues in the science community, I used to organise the science event known as “Science and Stormont”, which was held every year in Stormont with a working Assembly. Science is a refreshingly non-partisan area of endeavour, and at those meetings, year after year, representatives of all the major parties would come to this event to speak: we would have a sort of round table. Sometimes we went to listen to the Assembly in action later. These were very successful events and they mattered to the scientific community in Northern Ireland.

I understand entirely why the Bill is necessary, and I support it. Beyond that, I simply wanted to use my moment to make the point that science really matters, and science needs a working Assembly, and I very much hope that it will not be too long before we see that.

Baroness Suttie (LD)

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My Lords, it is a great pleasure to follow the speech of the noble Viscount, Lord Stansgate, on the unusually important but not often raised issue of science in Northern Ireland and the role that Northern Ireland can play in that regard. I, too, begin by paying tribute to Lord Brooke of Sutton Mandeville for the invaluable work he did in paving the way towards the peace process. I was very moved by the Minister’s comments—I know he used to work for him—echo his sentiments and send my condolences to Lord Brooke’s family.

This has been a very interesting and, in terms of recent debates, relatively short debate. No doubt many colleagues are back in Northern Ireland today for the local election polling day. As ever, I thank the Minister and his private office for the very courteous way in which he consulted all parties ahead of Second Reading. As is customary and has been said by all noble Lords speaking in this debate, we support the need for the Bill but deeply regret that it remains necessary. One can but hope that with the results of the local elections in Northern Ireland at the weekend will come an end to this continued state of political paralysis and limbo. The continued absence of a functioning Executive and Assembly is hugely to be regretted and is having an extremely negative impact on ordinary people’s lives. It is causing financial, governance and constitutional issues that are of concern to us all.

A Northern Ireland friend told me this week that her mother had a fall last Thursday afternoon and ended up at A&E at the Ulster Hospital in Dundonald. There were 165 people in the queue ahead of her, including children with broken bones, and nine ambulances were waiting outside. In Northern Ireland, as perhaps elsewhere in the UK, the NHS is in a state of crisis and, for as long as there remains no functioning Executive and Assembly, there is little or no opportunity to take major healthcare or other public sector decisions. The state of limbo is equally resulting in an inability to promote educational reforms, to move forward and make progress in dealing with the legacy of the past or to take long-term economic strategic and budgetary decisions for the future.

This is all the more tragic because there are potentially very positive economic opportunities for Northern Ireland. A major trade conference is planned for September and the US envoy has offered to bring a trade mission to Northern Ireland, but without a functioning Executive in place it will be hard to take full advantage of these opportunities. While praising the continued hard work and dedication of the Northern Ireland Civil Service, does not the Minister agree that this continued state of limbo is putting the Civil Service in a very awkward position? Although the Bill seeks to put sticking plaster over some of the difficult public sector finance issues facing Northern Ireland, does the Minister agree that the definition of public interest, as set out in the Bill, is ultimately a subjective political judgment?

It is not our intention on these Benches to table amendments to the Bill before us today, but I would like to ask some follow-up questions on reviewing public financing stemming from the amendments tabled by my friend Stephen Farry MP and the Alliance Party in the House of Commons last week. If the Minister is unable to give an immediate response to these questions, perhaps he would consider giving a more detailed response later in a letter.

First, would the Minister consider commissioning a report to provide an assessment of expenditure costs stemming from duplication as a result of divided communities, and its impact on public finances in Northern Ireland? Secondly, does he agree that it would be useful to engage with the Treasury on options to provide an “invest to save” fund to support the transformation and sustainability of public finances in Northern Ireland? Thirdly—an issue raised by other noble Lords already—will the Northern Ireland Secretary engage with Northern Ireland departments and the fiscal council in relation to the Barnett formula and a needs-based review?

The 25th anniversary of the Good Friday/Belfast agreement reminded us all that progress is made as a result of political leadership and courage, often at the highest level. The signing, welcome on these Benches, of the Windsor Framework agreement was also clearly driven by the Prime Minister. I appreciate that there are a great many other issues currently facing the Prime Minister, but does the Minister agree that finding a way to end the continued impasse and bring back a functioning Executive has to be a key priority for the Prime Minister and his team in the weeks ahead? If that does not happen and the current stalemate continues, can the Minister tell us what thought has been given to how and when the Government will decide that, for the sake of the people of Northern Ireland, enough is enough?

Lord Murphy of Torfaen (Lab)

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My Lords, obviously, I join the Minister and other Members of your Lordships’ House in referring to the work of Lord Brooke. Peter Brooke was a man of huge decency and integrity. He was a colleague of mine in the House of Commons, and obviously a very effective Secretary of State in the sense that he actually progressed the peace process. Also, and sometimes forgotten, he was a very effective chairman of the Northern Ireland Select Committee. He will be missed. He played his part in Northern Ireland history; there is no question about that.

We of course agree with the necessity of the Bill. It has a very innocuous name, the Northern Ireland (Interim Arrangements) Bill. What it actually means is that we are going to carry on with a sort of direct rule until we can resolve the problems with regard to the restoration of the institutions. That is not good, of course—we deeply regret it and I will come to that in a second—but with regard to the Bill, particularly on the issue of finance, there are important questions that the Government have to address. They have been raised by the noble Lord, Lord Morrow, the noble Baroness, Lady Suttie, and others. There is a case—I speak as a former Finance Minister for Northern Ireland—for a re-look at, reform of and rethink of how the Barnett formula applies to Northern Ireland.

The noble Lord, Lord Morrow, quite rightly referred to Northern Ireland, in the formula sense, being underfunded. He referred to the position of Wales, which I know a little about. It is quite interesting to reflect that the settlement changed for Wales because of the work that was done and the pressure that was put on the Government by the Welsh Assembly and the Welsh Government. Would that have happened without devolution? It might have done, but I doubt it. A sitting Government in Cardiff and a sitting Parliament could address these issues in detail and then negotiate with the United Kingdom Government. Therefore, the issue which the noble Lord, Lord Morrow, referred to is best addressed in the context of a restored Executive and Assembly in Northern Ireland.

I do not agree with the noble Baroness, Lady Hoey, that we could exist without an Executive and an Assembly in Northern Ireland. If we completely forget about the Good Friday agreement and the peace process, with a Parliament in Edinburgh and a Senedd in Cardiff, it would be impossible not to have a devolved Parliament in Northern Ireland, irrespective of the peace process. We must live with that, and we should, because it is the only answer to the problems of Northern Ireland. Every time a Member from Northern Ireland gets on their feet in the Commons or in this House, ultimately it is not good enough. Those people in the Assembly in Belfast are elected directly by the people of Northern Ireland to address the specific issues which are devolved to Belfast. The Minister knows that there are dozens and dozens of huge decisions which cannot be taken by civil servants. It is totally unfair, in a modern democracy, to put on the backs of people who are unelected the burden of having to make huge decisions which only politicians can decide, particularly regarding finance.

Obviously, we still understand the problems that the Democratic Unionist Party has with the settlement in Northern Ireland regarding the European Union. However, the Windsor Framework is a real step forward and should be the basis of proper negotiation to arrange a settlement. This morning I was looking, yet again, at Section 1 of the Northern Ireland Act1998, which I had the privilege of steering through the House of Commons a quarter of a century ago. It says specifically that Northern Ireland is a part of the United Kingdom and will only cease to be so if the people of Northern Ireland so decide by a majority. I cannot see that happening for some time to come—who knows?—but that is what it says. The principle of consent—

Baroness Hoey (Non-Afl)

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I thank the noble Lord for giving way and I agree with that part of the 1998 Act. I am sorry for going on about a very simple thing, but it is the kind of basic thing that makes people in Northern Ireland feel very left out: duty-free. Why can people flying from Belfast to anywhere in the EU not get duty-free, when you can fly from the rest of the United Kingdom to anywhere in the EU and get it? I got an answer recently which almost implied that part of the reason was because you could fly from Northern Ireland to the Republic of Ireland. Of course, as the noble Lord knows, you cannot fly from Northern Ireland to the Republic of Ireland, but that is just a simple thing that sets us apart.

Lord Murphy of Torfaen (Lab)

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I do not think that in any way alters the position that Northern Ireland is a part of the United Kingdom. The noble Baroness will recall, because she comes from Northern Ireland and lived the early part of her life there, that there has always been a difference between Northern Ireland and the rest of Britain in certain respects. For example, livestock and agriculture have always had to be checked as they came across the Irish Sea, for various reasons. There was a separate Government for decades in Northern Ireland which imposed various restrictions, but that in no way affected the fact that Northern Ireland is part of the United Kingdom, so long as the people in Northern Ireland decide it should be. I do not underestimate the problems that have arisen, frankly because of Brexit. Without Brexit, this dilemma would not be in front of us, but we have to live with it. It seems to me that the Windsor agreement is a good start.

There are elections today in Northern Ireland. We will not know the outcome for another day or so. The marching season will soon be upon us. The recess is not far away. However, that should not stop the Government from planning for proper structured negotiations with the political parties in Northern Ireland and the Irish Government, so far as they affect the agreement. There should be a big role for the Prime Minister in the weeks and months ahead to work with parties in Northern Ireland to get a settlement. Despite the problems which we have had in Northern Ireland over the last two years regarding the protocol and the difficulties about the suspension of the institutions, there is no doubt from when we celebrated the Good Friday agreement some weeks ago in Belfast and elsewhere—and I do mean celebrated—that there has been a huge change. The noble Baroness, Lady Hoey, said quite rightly that, tragically, there have been 150 deaths in Northern Ireland over the last 25 years, mainly as a result of terrorism. However, that must be set against the 3,500 people who perished in the 25 years before the Good Friday agreement. That is the real measure of where we are in Northern Ireland.

Lord Caine (Con)

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My Lords, I am very grateful to all noble Lords who participated in this debate, which was relatively short by our recent standards. I thank noble Lords for their kind words about my late colleague, Lord Brooke of Sutton Mandeville, and for their general support for this Bill. The noble Lord, Lord Murphy, referred to the title of the Bill including “Interim Arrangements”. When we were discussing this, I was very keen to avoid calling it “temporary arrangements”, given that everything in Northern Ireland that has had “temporary” attached it over many years has assumed an air of permanence.

I am also grateful to the noble Lord Murphy of Torfaen for reminding the House of Section 1 of the Northern Ireland Act 1998, which makes clear that Northern Ireland is a part of the United Kingdom and will never cease to be so without the consent of most of its people. Speaking for this Government, I would not want the current constitutional position to change. Regarding his point about the restoration of the institutions, and echoing other noble Lords across the House, including the noble Baroness, Lady Suttie, I assure all noble Lords that, irrespective of the calendar, our focus will remain very firmly on restoring those institutions which, as I said at the outset, are in the best interests of the union and of the people of Northern Ireland.

I politely disagree with the noble Baroness, Lady Hoey, who argued for the strengthening of local government and effectively the abolition of Stormont, which would be a fundamental change to the Belfast/Good Friday agreement. That is not a position that the Government can support. We remain firmly committed to the agreement and to the institutions across all three strands that the agreement establishes. Our priority is to make the agreement and the institutions work for the good of the people of Northern Ireland.

Unsurprisingly, a number of noble Lords focused on the current budget situation in Northern Ireland. As I said in my opening speech, if there is no restored Executive, it will be our intention to bring forward a Bill at the appropriate time to put the current budget allocations on to a legal footing. We will have a further opportunity to discuss the budget at that stage. However, picking up on one or two points, we recognise that the current situation is unsustainable and that Northern Ireland departments, in the absence of Northern Ireland Ministers, will have to face very difficult decisions to live within their budget, but these are unavoidable.

I heard my noble friend Lord Rogan and the noble Baroness, Lady Hoey, refer to the “punishment budget”, as some people have described it—but it is not a description that I accept for one second. The budget reflects the reality of the fiscal situation in which Northern Ireland currently finds itself.

It is for that reason that, over many years, the Government have recognised the unique challenges that Northern Ireland faces. I recall that the spending review in 2021 was the most generous since the restoration of the devolved Government in 1998-99. It gave Northern Ireland the possibility of multiyear budgets, as opposed to the single-year budgets that have bedevilled us over a number of recent years. Sadly that proved not to be possible.

In addition, we have seen billions of pounds of extra spending through the Stormont House agreement, the fresh start agreement, the confidence and supply agreement, and New Decade, New Approach. It is difficult to sustain the argument that Northern Ireland has been systematically underfunded by the Government. As the noble Lord, Lord Morrow, reminded us, public spending per head in Northern Ireland is still running at about 20% higher than the United Kingdom average.

However, I recognise that there is a discussion about the funding formula, which the noble Lord, Lord Morrow, raised in some detail. To echo the words of the noble Lord, Lord Murphy of Torfaen, that discussion would be far better taking place between the United Kingdom Government and a restored Northern Ireland Executive. In the spirit of openness, I am of course more than happy to have a conversation with the noble Lord about these matters. Likewise, I am happy to respond positively to the invitation from my noble friend Lord Rogan to meet the pharmacists in Northern Ireland.

A number of noble Lords again raised issues with the Windsor Framework. I know that the noble Baroness, Lady Hoey, and the noble Lord, Lord Morrow, feel very strongly about this. I gently remind noble Lords that the House of Commons approved the Windsor Framework by 513 votes to 29, and your Lordships by 227 votes to 14. It clearly represents the settled will of Parliament that the framework be carried forward and implemented. In our view, it delivers stability for the people of Northern Ireland, protects Northern Ireland’s place in the union and restores the balance of the Belfast agreement.

I agree with my friend, the noble Lord, Lord Bew, who made a powerful case in saying that the framework increases Northern Ireland’s agency. He referred to the role of the Stormont brake; it gives the Assembly a very powerful role in determining future EU legislation and regulations. For that brake to be effective and to be operated, we need a functioning Northern Ireland Executive and Assembly. I referred also to the institutional reforms raised by the noble Baroness, Lady Hoey.

The issues raised by the noble Baroness, Lady Suttie, reflected a number of amendments that were put forward in the other place in the name of her sister party, the Alliance Party of Northern Ireland. She raises important points, such as the costs of division in Northern Ireland, which are substantial and need to be addressed, and the transformation funds. I will write to the noble Baroness in more detail, but my initial reaction is that it is wrong to commit the Secretary of State to exploring any particular options at this stage. The Bill gives my right honourable friend a degree of discretion around this and it would probably not be right, as the Alliance Party was trying to do in the House of Commons, to put some of these things into legislation. But I am very happy to discuss these issues further and to write to the noble Baroness.

The noble Baroness, Lady Suttie, also referred to the position of civil servants under the legislation, as did the noble Lord, Lord Murphy of Torfaen. I agree that it puts them in a very difficult situation, and these concerns have been voiced within Northern Ireland itself. We are asking a lot of civil servants under this legislation. In our view, this approach is unfortunately necessary. It strikes the right balance between ensuring that governance can continue while giving parties in Northern Ireland the time and space to form an Executive. I entirely agree that this is not a long-term fix; it cannot be a long-term fix or a substitute for the proper re-establishment of a functioning devolved Government in Northern Ireland, in line with the Belfast agreement. On that note, I beg to move.

Lord Morrow (DUP)

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My Lords, Amendment 1 is in my name and that of my noble friend Lord Dodds of Duncairn.

Clause 2 of the Bill is concerned with:

“Advice and information on options for raising public revenue”.


My amendment requires that the advice should be expressly required to cover the Northern Ireland Fiscal Council report, Updated Estimate of the Relative Need for Public Spending in Northern Ireland, published on 2 May this year, and the precedent arising from the December 2016 agreement between the Welsh Government and the United Kingdom Government on the Welsh Government’s fiscal framework.

Some might suggest that all relevant things can and should be taken into account and it is not necessary to specify these two documents. However, they are of such central importance to the situation in which Northern Ireland finds itself that it would be a dereliction of duty not to put them front and centre of advice and information on options for raising public finance. I will consider both, starting with the agreement with the Welsh Government.

In 2007, the new Welsh Government’s programme for government identified the need to address the problems relating to the Barnett squeeze on the funding available for services for UK citizens living in Wales. To understand this, it is important to remember that before 1979, when the Barnett formula was introduced, the union was treated as a unit and funding allocations were made within that unit on a basis that was alive to need. The reason for considering a change in the funding formula at that time was devolution, which the then Government hoped would be delivered by referendum that year.

The initial proposal was that the funding formula should be needs-based. Treating England as 100, the Treasury claimed that on the basis of need, Northern Ireland should be rated at 131, Scotland at 116 and Wales at 109. However, a decision was made to delay the introduction of this new system and to use instead a simple interim model that allocated monies to Scotland, Wales and Northern Ireland based on their relative populations as a proportion of that of England. This temporary formula came to be known as the Barnett formula. Here we are 44 years later, and it remains in place, notwithstanding the 2009 report of the House of Lords Select Committee on the Barnett Formula, which called for its replacement with a needs-based formula, and a number of robust exhortations to the same end from your Lordships’ Constitution Committee.

When the Barnett formula was first applied, it was to a pre-existing level of spend that had been cognisant of need and thus with more money per head going to Northern Ireland, Scotland and Wales than to England. However, the challenge remains that all subsequent increments in funding from the introduction of the Barnett formula have not been based on need in Wales, Scotland and Northern Ireland, but have simply been the appropriate and proportionate fair share of what had been spent in England. Mindful of the populations of Wales, Scotland and Northern Ireland, that means that although incomes keep increasing, funding does not increase as much as it would if monies were allocated from the centre on the basis of need—as if the UK operated on a UK-wide rather than just an England-wide notion of need.

The spending differential between Northern Ireland, Scotland and Wales, on the one hand, and England, on the other, has reduced, and in the absence of correction, there would ultimately come a time of convergence, when spend per head in Wales, Scotland and Northern Ireland would be far below need. This downward pressure towards convergence is called the “Barnett squeeze”.

Baroness Ritchie of Downpatrick (Lab)

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My Lords, first, I apologise to your Lordships’ House for not being present last Thursday at Second Reading of this Bill; I was otherwise engaged in Northern Ireland at the local government elections.

The Bill deals with interim funding arrangements for Northern Ireland during the absence of an Executive and Assembly. In many ways it continues indirect rule and, I suppose, it gives civil servants limited powers. Before we move to the amendment itself, I want to ask the Minister whether the Bill itself might not be a recipe for judicial review and legal quagmires, centred on the issue of political power versus the extent of the authority of civil servants. Where does that power and control begin for civil servants and where does it end? In what circumstances can they act, and has Clause 2 of the Bill been tested for legal resilience in this respect?

Notwithstanding that, I have sympathy with the amendment brought forward by the noble Lords, Lord Morrow and Lord Dodds, because I believe that the Barnett formula should be based on the principle of need. We have already seen what has happened in Wales. The recent work of Holtham and the Northern Ireland Fiscal Council highlighted that, in Wales, funding is £124 per head of population while in Northern Ireland it is £121.

We know about the funding crisis in the Department of Health and in education and infrastructure; and only today, we learned about the shortage of special educational needs places. Earlier today, I met the chief executive of Women’s Aid in Northern Ireland and her chief operating officer. They are facing a funding crisis. At the end of the day, they need financial assistance to help women who have been impacted by abuse—abuse that has been persistent and prevalent for many years.

I do not disagree with the amendment and I have sympathy with it, but I honestly feel that the best place for this debate, and for action, is in a restored Northern Ireland Executive and Assembly where local MLAs and Ministers who are best placed to identify the needs of the local population in Northern Ireland can specify and outline those needs. They could then prepare a report and seek a delegation meeting with the Secretary of State for Northern Ireland, the Chancellor of the Exchequer and the Treasury ministerial team to make a case for a review of the Barnett formula and the necessity of a needs-based assessment.

If anything, we need our own local government in Northern Ireland. We need all the institutions of the Good Friday agreement to be restored as quickly as possible.

Baroness Foster of Aghadrumsee (Non-Afl)

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My Lords, I rise to support the amendment in the name of my noble friends Lord Dodds and Lord Morrow. Reflecting on the comments of the noble Baroness, Lady Ritchie, we absolutely do need to see our Executive up and running again on a sustainable and fair basis. Of course, that was also the case in 2017, when Sinn Féin collapsed the Executive for not one, not two, but three years.

During those three years, which should have been spent reforming our National Health Service after a very expensive report was brought forward in the name of Rafael Bengoa, that report sat on the shelf, because the then Health Minister Michelle O’Neill, along with her colleagues, decided to come out of government. As a result of that, we have seen the sustainability issues in Northern Ireland get worse over time. I say that as, along with my noble friend Lord Dodds, a former Finance Minister in Northern Ireland.

Baroness Hoey (Non-Afl)

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My Lords, I strongly support this amendment in the names of the noble Lords, Lord Morrow and Lord Dodds. I agree very much with what has been said by everyone who has spoken so far, although obviously I disagree with the noble Baroness, Lady Ritchie, that somehow the only way in which this can be dealt with is by getting the Executive back. There is no reason for that, given that the Fiscal Council said what it did, and the Minister knows that Northern Ireland is not being fully funded because the Barnett squeeze is getting greater. Surely if the Government know that that is happening to a part of the UK, they should be able to act without waiting for an Assembly or an Executive, which, given what has been said, is very unlikely to come back in the near future. I urge the Minister not to treat this as some kind of bargaining point with politicians in Northern Ireland; that is not the way to deal with this serious financial situation.

It is important that the point about consultation be included in the Bill. Being realistic, there are things in Northern Ireland that—forgetting the whole issue of the Barnett formula and the overall funding—could raise more money. That has always been difficult because controversial decisions are very difficult to take between the two mainstream political parties and the two factions —or perhaps three factions—in Northern Ireland. There are some things that are not the same as in the rest of the UK but should be. No doubt I would be slated by the media in Northern Ireland for saying this, but I genuinely think we should be looking at prescription costs. There is a huge amount of waste due to the fact that prescriptions are free for everyone in Northern Ireland. That is just one small thing, but I am certain that, if the public were properly consulted on it, talked about it and understood it, there would be support in many areas for that way of raising extra funds.

There are other such issues but I will not go into any of those. I know the Minister is particularly knowledgeable about and supportive of Northern Ireland, but he may not have a Secretary of State who is necessarily quite so knowledgeable and supportive, so it is important that the Secretary of State listens to what people who understand Northern Ireland are saying.

As we are on finance, I will ask the Minister about policing in Northern Ireland, which is in a particularly difficult situation over its funding. Morale among the Police Federation there is very low. Are the United Kingdom Government giving extra money to the police to make up for the huge amount that it cost to have the very short visit of President Biden and all the other dignitaries who flew in and flew out again as quickly as possible, having joined in the commemoration of the Belfast/Good Friday agreement? It cost a huge amount of money to bring over police officers from Great Britain. Have the Government given any extra money for that? If not, why not?

We had a wide-ranging debate at Second Reading, so there is no point going over all the arguments again; we cannot in a debate on an amendment anyway. But let us not forget that we are here discussing the Bill only because we have no Executive, and we have no Executive because this Government—our Government—have decided that Northern Ireland is to be treated differently. We are being left under EU trading rules, which have set us apart and will set us further apart as time goes on. That is the really important issue that noble Lords need to remember.

Lord Dodds of Duncairn (DUP)

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My Lords, I too am sorry that I was not able to be present, along with other noble Lords and noble Baronesses who have spoken, for the Second Reading of the Bill last Thursday because of other commitments in Northern Ireland. I put it on record that it was somewhat strange that the Second Reading was scheduled for the day of the local government elections in Northern Ireland. If nobody in the Government realised that, it tells us a lot about competence; if they did realise it and scheduled it anyway, it tells you a lot about their regard for Northern Ireland. I would like to know what actually happened that such a thing should be scheduled in that way.

I am glad that we have the opportunity to debate the amendment in the names of my noble friend Lord Morrow and me. It raises an important issue because, despite what is constantly said about the restoration of the Executive and the Assembly, if they were back tomorrow that would not make the slightest difference to the underfunding of Northern Ireland. In fact, Ministers—newly installed Ministers—would have to go about the business of slashing public services in health, education, policing and so on to an unprecedented degree. I do not agree with the idea that we should wait for the Executive and the Assembly to be restored. The need is here and now. The underfunding is taking place as a result of decisions taken here, in Whitehall and Westminster, by the Treasury.

It used to be the case over many years that the Northern Ireland Office was the advocate for Northern Ireland vis-à-vis central government and the Treasury, but it now appears that the current Secretary of State’s position is to become an advocate for the Treasury against the interests of Northern Ireland. He came on the other day to say that there would be no problem finding £100 million for a sports stadium. That is somewhat controversial in Northern Ireland but he was saying, “No problem at all—we’ll find the money if the bid’s successful”. But he cannot find an extra penny piece to deal with extraordinarily long waiting lists in the health service, education underfunding, police underfunding and the rest.

That sort of glib response to the crisis in Northern Ireland by the current Secretary of State, married to the refusal in this Bill to bring forward powers to give direction to civil servants, is an absolute abdication of responsibility by government Ministers who will no doubt respond and say, “Well, you should get into the Executive”. But they themselves are responsible for the current position in Northern Ireland by their refusal to restore the power of the Northern Ireland Assembly to make laws over 300 areas. Right across the economy of Northern Ireland, there are powers that do not reside in Belfast or here at Westminster or in Whitehall; they reside in Brussels with the European Commission—unaccountable and unanswerable. The Government need to recognise the current situation as it exists.

My noble friend Lord Morrow has very ably and in considerable detail set out the arguments behind our amendment. The Government may respond by saying that for many years they have funded Northern Ireland considerably well; the Minister referred to this at Second Reading. But whatever the past, what we are dealing with is now. As a result of government decisions taken by the Treasury, Northern Ireland is more below need on a funding-per-head basis than has ever been the case in any constituent part of the United Kingdom in the last 40 years. That is unacceptable and should not continue a moment longer. They cannot justify underfunding today on the basis of past settlements. Today’s budgetary position in Northern Ireland means social, economic and political dislocation. That is agreed and assented to by all the political parties in Northern Ireland across the board. It cannot be justified by looking backwards to previous financial settlements.

We will no doubt be told that Northern Ireland receives 20% per head more than the UK average spend. But, as we have heard, the true measure is spending against need. In Wales, steps were taken despite spending per head there being above the UK average. This is a question of asking not for favours or a privileged position but that the funding is structured so that services for the people of Northern Ireland meet the level of need, as is the case elsewhere in the United Kingdom. It is a quest not for privilege but for a level playing field. It is not a question of comparing Northern Ireland spending per head against England; it is about comparing Northern Ireland spending against need.

Of course, many people in Northern Ireland suspect the real game that the Northern Ireland Office is playing. I do not include in this the Minister answering on the Front Bench today, who has displayed time and again a willingness to fight Northern Ireland’s corner and stand up for the union. There are people within the NIO who no doubt believe that, by imposing this kind of budget and underfunding Northern Ireland both in the short term and going back some years, we will fix all this or come forward with a package if only the Executive and Assembly are restored and unionists operate the Northern Ireland protocol/Windsor Framework. That would entail operating measures that are injurious to the union and breach the Belfast agreement, the Acts of Union and the New Decade, New Approach document—the basis on which Northern Ireland devolution was restored in January 2020.

We have to face the reality that the failure of the Government to restore Northern Ireland’s place within the United Kingdom—subjecting it to arrangements that undermine democracy and are a breach of the agreements—is the fundamental problem we are grappling with. Unless that issue is tackled, we will continue to have a lack of devolved government in Northern Ireland. We have to accept the fundamental reasons why we are in the present position. Of course we do not want to see legislation having to be passed in this place to deal with the situation and would far rather have the Executive and the Assembly restored, but we have to have it back on the basis that we have powers to make the laws that affect and govern the economy of Northern Ireland. That cannot be avoided, and the fact is that the restoration of devolution lies in the Government’s hands.

The DUP stood on a manifesto in which we made it clear that the Northern Ireland protocol—the Windsor Framework—needs replacing

“with an arrangement that passes our seven tests”,

including getting rid of the Irish Sea border. It means restoring democracy and giving us the power to formulate and pass laws over our own economy, which seems very simple, straightforward and basic in terms of equal citizenship for all citizens of the United Kingdom. We are asking for something that would be seen as a matter of fact and common sense in every other part of the United Kingdom. Indeed, those who advocate different arrangements would never accept it for one minute for their own constituency, region or country in the United Kingdom.

Lord McCrea of Magherafelt and Cookstown (DUP)

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My Lords, I too support the amendment in the name of my noble friends Lord Dodds and Lord Morrow. I also apologise for not being able to be present at Second Reading last Thursday. I am sure that it does not escape the notice of noble Lords that there was a council election on that day. Everyone knew about it, including the Government, yet they had a Second Reading debate on a Northern Ireland Bill in this House.

Like the Minister when he spoke on that occasion, I too regret the fact that we are debating the legislation in the absence of an Executive at Stormont, but the Government have known for over 13 months that a functioning Northern Ireland Assembly and Executive could not continue until the genuine concerns expressed by the unionist elected representatives were adequately addressed. One can bury one’s head in the sand or face reality. We have found out in recent days that burying one’s head in the sand does not do anything; therefore, you have to face reality.

The Northern Ireland protocol and the Windsor Framework were forced on the Northern Ireland people without consent. We all know that the Belfast agreement was built on the very foundation of cross-community consent, but, sadly, the constitutional position of Northern Ireland within the United Kingdom was compromised to appease Europe during the withdrawal arrangements and at the behest of the Irish Republic.

In last week’s debate, the Minister stated that the 25th anniversary of the Belfast agreement is

“an opportunity for all of us to recommit to building an even brighter future for Northern Ireland. Now is the time to decide how we want to move forward together, to create a better future for and deliver on the priorities of the people of Northern Ireland. That includes a more prosperous economy and better, more sustainable public finances and services”.—[Official Report, 18/5/23; col. 381.]

No one could disagree with the sentiments so ably expressed by the Minister, who I think genuinely believed in them. But, in reality, that is all that they were: sentiments.

As we all know, since we last met in the House to discuss Northern Ireland business, there has been an election. Over recent months, the people of Northern Ireland, especially unionist voters, have been bombarded with endless anti-DUP propaganda, much to the delight of some and the dismay of others—so there has been a process of brainwashing the public. Not only was that fuelled by political opponents within republicanism or nationalism but so-called independent observers and commentators—cheered, aided and abetted by the so-called great and good in society—joined in to blame every ill in society on the DUP, including the smallest pothole in some back laneway and the serious, long and grievous waiting lists in the health service.

Of course, none of that happened and those accusations were not made when Sinn Féin boycotted the other place, and Stormont and the Northern Ireland Executive for three years. In fact, I remember debates in this very House when we were told that we were all to grow up and do something to get us out of the situation. In actual fact, it was Sinn Féin that had stepped aside from the Executive and from Stormont, but Members of this House did not have the courage to name Sinn Féin. No: everyone was to blame. We were supposed to be to blame for the actions of Sinn Féin. They pointed the finger and chided us, telling us to return to the Northern Ireland Executive. So here we are today.

After all the brainwashing, the unionist community took a principled stand, as did its elected representatives, on our constitutional rights and demanded to be treated as equal citizens within the United Kingdom. Of course, we are now told that the answer to every ill will be to return to Stormont. Many in this House hoped that, with all the brainwashing process in operation, they would witness the demise, or least the humiliation, of the DUP in the election and the elevation of the Alliance Party as the up-and-coming, as they saw it, central bloc to challenge the DUP. That did not happen. Indeed, Members of this House must face the reality that we have not gone away, you know.

There has been a lot of talk since the election about Sinn Féin’s political tsunami at the election. In reality, the DUP faced a political tsunami of criticism and bile before the election but, through the ballot box, we now know that the unionist people expect their politicians, at a critical moment, to honour their election manifesto pledges, no matter how hard the road will be, and we will.

It is true that Sinn Féin has increased its representation and become the largest party within local government by practically wiping out the SDLP, but was the political tsunami as it has been told to us? In actual fact, Members have perhaps not realised that Sinn Féin went down 20,000 votes in the council elections from the last test one year ago, the Assembly election. The Alliance Party went down by 17,000 votes, the Ulster Unionists by 15,000 votes and the SDLP by 13,000 votes. The party that went down least in votes since that last test was the DUP. I know that this is very hard for some to swallow. Indeed, commentators nearly choked admitting it, and the media outlets found it extremely hard to acknowledge that the DUP did not lose one seat at the Northern Ireland council elections.

So we faced political brainwashing, which failed, but we now face and confront what is, in my book, political blackmail. Part of the Bill’s provisions relate to decision-making for the Northern Ireland Civil Service. Recently, the Government set a budget and, according to the Northern Ireland Fiscal Council, civil servants will be expected to find £800 million in cuts and revenue-raising measures. The cuts demanded are harsher than any facing other Whitehall departments, but it is hoped that, when they begin to hit the community, the DUP will be blamed again.

Civil servants now want to meet the political parties in Northern Ireland to guide them where to make the cuts and to slash services. That is what the new Executive are supposed to do. Because of this budget, we are told that 300 fewer nurses will be trained this year while the health service is already understaffed. To pay the nurses a proper wage, as negotiated on the mainland, more cuts will have to come. That is at a time when the Government here in London boast that they plan to train thousands more nurses and doctors.

Under New Decade, New Approach, we were promised that police numbers would be 7,500, but while in England the Government boast of recruiting 20,000 new police officers, our chief constable tells us that we are to reduce our numbers of police officers, which are now down to 6,500.

My noble friend Lord Morrow outlined that, compared to Scotland and Wales, our budget has been underfunded by £1.2 billion. In my honest opinion, this underfunding and unfair budget for Northern Ireland is not by chance but by design. Those in authority know well that these cuts, when they come, will hurt the sick, children, the vulnerable, the elderly and the weakest in society, but they believe that this would be a price worth paying to force the Assembly and the Executive to get up and running.

The Government have already told us that the black hole in our finances was because of the Executive and that Assembly decisions and the crisis in the health service, infrastructure and education happened under the stewardship of this Executive. What can the Executive do to alleviate the problems facing society when they are told that they will have to make cuts, and more cuts? I am reminded of when I was in the other place and the Labour Government were leaving office, and a certain Minister wrote a famous note that said, “There’s no money left”. We are told that there have to be cuts, but we all know that this is to be used to endeavour to blackmail the DUP to get back into the Executive, with a nod and a wink that money will follow if they do—in other words, the money tree will magically blossom again. But that would be at the cost of tramping over every genuine promise made to the unionist electorate that we would stand firm until the Government granted us equal rights within the United Kingdom. Some will say, “Isn’t that what most parties do—break their promises?”

As I conclude, I have no doubt that the Government, facing the reality posed by recent elections, will seek to cobble something together, hoping to satisfy some with meaningless words, but that will not do. Unionists as well as nationalists have faced difficult days because of the 30 years of the IRA campaign but, with resolve and belief in the right of our cause, we must prevail. I trust that the party in government, which prides itself on being named the Conservative and Unionist Party, will honour the pledge it made to the people of Northern Ireland to respect all parts of this United Kingdom, and thereby rid us of the undemocratic protocol and Windsor Framework and allocate the necessary funds to make life more comfortable for the less well-off. I support the amendment.

Baroness Suttie (LD)

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My Lords, I will endeavour to be fairly brief. I have quite a lot of sympathy with the DUP amendment. Indeed, I raised similar points at Second Reading last week, and it is similar to an amendment tabled in the House of Commons by my friend Stephen Farry MP.

There is no doubt that Northern Ireland faces an extremely challenging situation as regards future public financing, but I am afraid that I completely agree with the noble Baroness, Lady Ritchie: surely the place for this to be debated is the Northern Ireland Assembly. I am under no illusions that a fully functioning Assembly and Executive would immediately be able to resolve these complex issues, but they would provide one strong voice to lobby the Treasury—a voice that is much closer to the people affected by these issues.

I have to say to the noble Lord, Lord McCrea, that I am a democrat—a Liberal Democrat—and someone who believes in the union and believes strongly in democracy. Both the House of Lords and the House of Commons have overwhelmingly supported the Windsor Framework agreement. I hear what noble Lords have said; I understand there is still a strong feeling about this issue. I sincerely hope the Assembly and Executive will be fully functioning as soon as possible but, listening to the debate this afternoon, I am perhaps less optimistic than I was before the debate. Can the Minister say, if it is not fully functioning again, how these issues will be dealt with in terms of parliamentary oversight? I presume, as ever, he will consult and involve all the political parties on this, as a Bill has to come forward, but this is just a plea to the Minister to make sure that all parties are consulted. Could he say a few words about how parliamentary oversight could be properly achieved? I plea, one more time, to the noble Lords opposite: surely a fully functioning Assembly and Executive is the best way forward, to have their voice heard loud and clear.

Lord Murphy of Torfaen (Lab)

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My Lords, here we are. I have been either asking or answering questions on the Barnett formula for something like 32 years. It started off as a formula, and then you add a floor, and now you have a Barnett squeeze. Some of your Lordships may remember that Lord Joel Barnett, himself, who invented this, towards the end of his life completely denounced it and said that it was not suitable any more. Indeed, it probably is not. We lived with it for the last 20 or 30 years because there was no real alternative, but the world has changed since then, certainly in terms of Wales, Scotland and Northern Ireland.

The noble Lord, Lord Morrow, put a convincing case for a very serious look at the situation at the moment. I can tell him and Members of your Lordships’ House that, when I was the Secretary of State for Wales, I did not persuade my colleagues in the Treasury that there was a need for a change. I tried, but when you are a territorial Secretary of State, you are always battling with the Treasury, the Chancellor of the Exchequer and the Chief Secretary to the Treasury. You are in the same team. Sometimes you win, and sometimes you lose. But the key to the success of what happened in Wales, with the Holtham commission, was that it was in fact conceived by the Assembly, set up by the Government of Wales, and had cross-party support when the commission reported. That meant that there was a seriousness about that report which impressed the Treasury. It was convinced, after all this discussion and all these commissions, that things had to change, but I could not do it on my own. It had to be done with the Assembly, the Welsh Government and Holtham and his commission, which spread over a couple of years. That is how it was achieved.

The same thing is going to happen in Northern Ireland. There has to be a concerted effort by all political parties in Northern Ireland to be able to persuade the Government that there is a serious case for equating Wales and Northern Ireland—I leave Scotland out at the moment, as that is an even more complicated case. But that is only reasonably sure of success if it is not simply left to the Secretary of State for Northern Ireland. There has to be this pressure internally, from those who have been elected and thus are there in that Assembly, elected by the people of Northern Ireland to take issues like this up.

I know there is a meeting in the next week or two with the head of the Northern Ireland Civil Service. She has quite rightly asked political parties for some guidance as to what to do. A budget is not simply adding up and taking away figures; a budget is about priorities of government. What do you put first? What do you put last? Where do you put this money and that money? You do that on the basis of proper consultation, not only with Members of the Assembly but with all the political parties. That can best be done only in the context of a democratic Assembly and government.

There is no question that there is some merit in discussing these issues in your Lordships’ House, but we are not here to run Northern Ireland; we have not been elected to do that—we have not been elected to do anything but certainly not to do that. When that meeting is held in the next week or two, I hope that the parties in Northern Ireland will impress upon the head of the Northern Ireland Civil Service the importance of trying to work out what those priorities would be and how to do it. Rather her than me—it is a terribly difficult thing to do if you are not an elected politician. The decisions are so tough and so harsh, and in some ways so impossible, that they can be made only by people who are answerable in a democracy to the electorate. That is not the case at the moment.

Yes, there is a very strong case for looking at change, and a strong case for asking officials to do what they did in Wales, but that can best be achieved only if the Assembly and the Executive are both restored.

The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Caine) (Con)

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My Lords, before replying to the debate that we have just had, I would like to make a very brief statement on legislative consent. Clearly, the reason we are here is that there is neither a functioning Executive nor a functioning Assembly in Northern Ireland. It has therefore not been possible to seek a legislative consent Motion.

I thank the Committee for the constructive debate that we have had this afternoon. I am very grateful to all noble Lords who have spoken to the amendment. I thank the noble Lords, Lord Morrow and Lord McCrea, for their time this morning, coming in to discuss this issue with me in the Northern Ireland Office.

Amendment 1, tabled in the names of the noble Lords, Lord Morrow and Lord Dodds, provides an example of the advice or information that the Secretary of State could request from the Northern Ireland Civil Service under Clause 2 of the Bill. Specifically, the amendment references the Northern Ireland Fiscal Council’s 2023 report—referred to by a number of noble Lords this afternoon—entitled Updated Estimate of the Relative Need for Public Spending in Northern Ireland. I join noble Lords in thanking the Northern Ireland Fiscal Council for its work, and have noted its report on the updated estimate of the relative need for public spending in Northern Ireland. The noble Baroness, the former First Minister of Northern Ireland, was right to refer to His Majesty’s Government’s role in the establishment of the Northern Ireland Fiscal Council, following both the fresh start agreement in 2015 and New Decade, New Approach in 2020. The Secretary of State, my right honourable friend Chris Heaton-Harris, met the chair of the council, Robert Chote, two weeks ago to go through the report’s findings. I assure the Committee that we will have further such meetings with him.

As noble Lords will be aware, there are clearly many different ways to assess need, as the Northern Ireland Fiscal Council itself acknowledges in its report. However, the report indicates that funding is currently broadly in line with relative need, through a combination of the Barnett-based block grant, locally generated revenue and additional UK Government funding packages. In that context, I refer noble Lords to the penultimate bullet point on page 3 of the report and the penultimate paragraph on page 21 of the report.

I should add that the report also makes clear that locally accountable leadership—to echo the comments of a number of noble Lords this afternoon—is urgently required to ensure that Northern Ireland has a stable and flourishing economy.

For many years, the Government have recognised the unique challenges that Northern Ireland faces. The argument that it has been systematically underfunded by the Government simply does not hold water, in my view. In the 2021 spending review, the Government announced that the block grant for Northern Ireland would be £15 billion per year, on average, over the next three years, representing the largest settlement since the restoration of devolution in 1998-99. We have provided around £7 billion in additional funding to Northern Ireland since 2014, on top of the Barnett-based block grant. As a number of noble Lords pointed out, the Northern Ireland budget per person is around 20% higher than the equivalent UK government spending in other parts of the United Kingdom, and it is set to rise to around 25% by 2024-25.

In 2013, shortly before we brought the G8 summit to Northern Ireland, we made available £300 million in additional borrowing power and funding top-ups through the building a prosperous and united community package. We made available almost £2 billion in additional spending power for Northern Ireland as a result of the Stormont House agreement in 2014, a further £500 million through the fresh start agreement in 2015, and £2.5 billion of financial support and flexibility through the confidence and supply agreement in 2017.

In more recent years, we have invested over £3.5 billion in Northern Ireland through the £400 million new deal for Northern Ireland, £617 million for four city and growth deals covering all of Northern Ireland, £730 million through PEACE PLUS, and £2 billion in funding and a Barnett investment guarantee in the New Decade, New Approach financial package, following the restoration of the Executive in January 2020. Noble Lords will recall that the priorities committed to by the Northern Ireland Executive within New Decade, New Approach specifically included £245 million earmarked for the transformation of the health service and wider public sector. The UK Government are also investing over £250 million in Northern Ireland through the levelling up fund, the UK shared prosperity fund and the community ownership fund.

Despite these significant levels of investment from the UK Government, over and above the Barnett-based block grant, the Northern Ireland Executive have consistently been unable to allocate this funding to deliver the much-needed transformation of public services. In that context, I acknowledge the comments made by the noble Baroness, the former First Minister, regarding the period from 2017 to 2020. Consequently, the £200 million health transformation funding provided through the confidence and supply agreement, and the £245 million of funding for public service transformation allocated through New Decade, New Approach, have primarily been used for short-term funding pressures, not to deliver genuine reform.

I gently echo the point made by the noble Lord, Lord Murphy of Torfaen, at Second Reading—and to some extent repeated this afternoon—when making comparisons with Wales on this issue. It is important to underline that that arrangement was negotiated between the Welsh Government, the Welsh Assembly and the Treasury. As the noble Lord, Lord Murphy, reminded us, the Holtham commission was established in 2008 and negotiations took place over the next seven years. That seven-year period is crucial to today’s debate because it underlines that this is not an issue that could be solved overnight, even with the best will in the world.

As was pointed out by a number of noble Lords, particularly the noble Baroness, Lady Suttie, and the noble Lord, Lord Murphy of Torfaen, it would be far more powerful if the case made by noble Lords on the Benches behind me were made from a functioning Stormont. It will not surprise anyone in this Committee to hear me say that this is an issue best addressed in the context of a restored Executive and Assembly in Northern Ireland, in discussions with the Treasury. I agree entirely with the noble Baroness and the noble Lord on those points.

More broadly, in the absence of an Executive the UK Government will be able to commission advice from the Northern Ireland Civil Service—I mentioned this at the outset—on how current funding can be used more efficiently to the benefit of the people of Northern Ireland. However, it would not be right for me to commit the Secretary of State to exploring certain defined options—that would be the effect of this amendment—in advance of commissioning Northern Ireland departments for advice on options for budget sustainability.

The noble Baroness, Lady Suttie, asked about parliamentary oversight. She and other noble Lords will be aware that, in the continuing absence of an Executive, we will need to bring forward a budget Bill, which will be debated in your Lordships’ House.

I am of course willing to continue to engage with noble Lords, particularly those who brought this amendment —as I referred to earlier, I did so this morning—on these important issues. In that spirit, I invite the noble Lord to withdraw the amendment.

Lord Morrow (DUP)

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My Lords, I thank everyone who has contributed to the debate. If there is one striking note, it is that I did not hear anyone say they oppose what we are trying to do, so I will take that as a positive and welcome it. Some, of course, have said, “If we had an Executive” or if we had this or that, but I have always found in life that you are better off moving from where you are, rather than where you would like to be. That is the only way we are going to move forward. If, one day, there is an Executive—I can say with some degree of confidence that it is not going to be tomorrow—they will no doubt deal with those issues.

I was struck by one thing the Minister said when he summed up. He said that we extended additional powers for borrowing some £300 million. In my experience, any time I borrowed money I always had to repay it and sometimes, the pain of repaying it was nearly as great as the pain of asking for it. Incidentally, I never had to borrow £300 million; that just would not have happened. The Members who spoke highlighted different issues; for example, that our health service is where it is, and that we have monumental waiting lists. However, we had those when we had the Executive. There are three of us here—the noble Baroness, Lady Foster, my noble friend Lord Dodds and I—who have at different times served in that Executive. I nearly forgot—how could I?—the noble Baroness, Lady Ritchie, also served in it. We are not antagonistic to devolution. We know there are merits in it but, for goodness’ sake, can those who see our salvation entirely in a restored Executive please take on board that that will not happen at present because we do not have a level playing field? When we get to that stage, we will all be enthusiastic and break down the gates of Stormont to get in, but that is not where we are, so I ask noble Lords to take cognisance of that.

What happens when devolution is not functioning? Is it not the responsibility of government to step in and accept responsibility, as a government, and keep things moving forward? That, surely, has to be right. I do not doubt for a moment the Minister’s sincerity— no one has—but we say to the Government, “You have responsibility; let’s get on with it.” The noble Lord, Lord Murphy, quickly corrected himself and reminded us that none of us here is elected, but the other place is elected. Is that not their responsibility, or do they just throw up their hands and say, “Oh well, we can’t do anything here”? They cannot do that. Let no one underestimate the difficulties there will always be in keeping devolution afloat. Those will always be there, but the Government have a responsibility to ensure that when things break down back home, they do not shirk their responsibility to do some of the heavy lifting here to encourage the people of Northern Ireland and ensure that they do not suffer.

My Lords, I will stop there. I beg leave to withdraw my amendment, which was intended more as a probing amendment.