Northern Ireland Budget (Anticipation and Adjustments) (No. 2) Bill

(Limited Text - Ministerial Extracts only)

2nd reading: House of Commons
Tuesday 5th March 2019 Commons Chamber

[The Secretary of State for Northern Ireland (Karen Bradley)]

I beg to move, That the Bill be now read a Second time.

As I have stated to the House on a number of occasions over the 14 months that I have been in this role, and as my predecessors did previously, the UK Government have a responsibility, in the absence of a functioning devolved Government in Northern Ireland, to ensure good governance and to protect the interests of all parts of the community. We have a duty to safeguard public services and public finances. The Bill before the House today upholds that duty by giving certainty to Northern Ireland finances for the 2018-19 financial year and by enabling Northern Ireland Departments to continue to deliver public services into the first half of 2019-20.

Last year, the UK Government had to step in and ask Parliament to legislate for the 2018-19 budget for Northern Ireland. This was not a step that we wanted to take, but it was a necessary step to give a clear, legal basis to Northern Ireland Departments to enable them to manage resources and perform the important work that they continue to do in the absence of an Executive. I want to put on record once again my admiration for the work that the civil servants in the Northern Ireland civil service do in the absence of political leadership. The legislation that we passed, the Northern Ireland Budget Act 2018, did not set out any direction for how spending decisions should be made. Instead, it set out in law departmental spending allocations within which permanent secretaries could deliver on their respective responsibilities. That Act was passed in July. Since then, the Northern Ireland civil service has continued to assess where pressures lie across the system, and it has reallocated resources as required. As we approach the end of the financial year, those changes need to be put on to a legal footing, as is a standard part of any annual budgetary process, and that is what this Bill does.

In addition, the Bill will provide for a vote on account for the first half of next year, to give legal authority for managing day-to-day spending in the run-up to the usual main estimates process. This is a normal part of the estimates process. This year, however, following discussions with the Northern Ireland civil service on the pressures it faces in the year ahead, I am proposing in this Bill to provide a higher than normal level of vote on account of 70%.

[Lady Hermon (North Down) (Ind)]

The Secretary of State will be well aware that, in evidence to the Northern Ireland Affairs Committee, a considerable amount of criticism has been expressed of the budget allocation to the Education Department. In particular, we have heard evidence that primary schools have had to ask for donations of toilet roll, in addition to pencils and the other things that one would usually expect. Can the Secretary of State guarantee that, following the increase in the budget to the Department of Education—many other Departments are in the same situation—we will not see a repetition of primary schools in Northern Ireland asking for donations of toilet roll?

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[Karen Bradley]

The hon. Lady makes a number of important points, the first being that we have rightly increased spending for the Department of Education. This is an area in which there is a clear need for increased spending, and the permanent secretary at the Department was keen to ensure that the Government were aware of that. That is why, in the allocations for 2019-20 that were set out in the written statement last week, there is an increase in spending power for the Department of Education. The hon. Lady also makes a point about how that spending happens. The difficulty in the absence of Ministers in Stormont is that spending cannot be directed from this House. She also refers to issues within education in Northern Ireland. There is an undoubted need for reform of the system to ensure that money is spent appropriately and gets to the frontline and to the children and students who need it most, but we need Ministers to do that, which is why Stormont must be restored as soon as possible.

[Tony Lloyd (Rochdale) (Lab)]

I am interested in what the Secretary of State said in response to the hon. Member for North Down (Lady Hermon). I am looking at the Secretary of State’s written statement and the announcement of an extra £140 million for education, health and, as it happens, justice, but she says that it was provided

“in recognition of the lack of opportunity for more fundamental service reconfiguration over the last 12 months”.—[Official Report, 28 February 2019; Vol. 655, c. 23WS.]

This may be new money, but it will provide no new services and it comes as a result of a failure of the political process in Northern Ireland to reconfigure those services.

[Karen Bradley]

The additional funding for health and education is partly down to the new money that the Treasury has found—the £140 million—but it is also down to Barnett consequentials and other reasons. We have worked to ensure that the money that is needed by Departments, as requested by the permanent secretaries, is given to them, but the shadow Secretary of State is right that it is for business as usual activities. Major policy decisions cannot be taken at this stage because that needs political leadership.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

My right hon. Friend is right to say that this is not simply a matter of uplifting the amount of funding to education or healthcare; this is also about trying to work out how best to spend that money. Will any of the £4 million in transformation funding that she identified last month be used to try to work out how the footprint of the education and healthcare estate might be better utilised?

[Karen Bradley]

We are keen that the Northern Ireland civil service does the necessary work to prepare for the transformation of health and education and for the urgently needed reforms but, to be clear, the actual reforms can only be made once Ministers are in place in Stormont to make the decisions and give political direction.

Returning to the vote on account, the reason why it is 70% in this Bill, rather than the normal 45%, is that that recognises the increased spending pressures facing public services and the lack of Ministers in place to take reactive and decisive steps to respond to emerging or escalating pressures. It also recognises the uncertainty of the political situation in Northern Ireland in the months ahead. In the light of that context, such a level of vote on account is reasonable and provides the practical and legal certainties to protect public services in any circumstance and up until the point that Northern Ireland budget legislation for 2019-20 is taken through to secure funding for the full year. It goes without saying that I genuinely hope that a new Executive will be in place to take their own budget legislation forward for 2019-20, but this Government stand ready to take it through if needed.

To be clear, this Bill does not represent a budget for the year ahead. It does not seek to set out in legislation the departmental allocations that I outlined in my written statement on 28 February, because the headline allocations will require legislation later in the year. However, until that point, the vote on account in this Bill and the draft Northern Ireland budgetary position for 2019-20, as set out in my written statement last week, give the necessary clarity and certainty to Northern Ireland Departments to enable them to take decisions and plan and prepare for the year ahead.

[Lady Hermon]

I am grateful to the Secretary of State for allowing me to intervene for a second time. She has said twice in quick succession that the Bill is to allow a budget that takes into account any circumstances in Northern Ireland—that allows Departments to plan ahead. May I just mention Brexit to her? Can she actually tell us how much has been allocated in the Bill towards Brexit preparations and does that allocation take into account—heaven forbid—the possibility of a no-deal Brexit?

[Karen Bradley]

I repeat: the Bill is about putting on a statutory footing the spending that has already taken place. I will be happy to furnish the hon. Lady with information about money that Departments in Northern Ireland have spent on planning for Brexit, which covers all Brexit planning. The allocations in the written ministerial statement do include moneys that have been allocated from the Treasury for planning for Brexit, so that is in the written ministerial statement, but the budget today is about the money that has already been spent. I will be happy to give the hon. Lady full information about money that has been spent to date and up till the end of the month. We are putting that on a statutory footing today. The hon. Lady looks as if she is itching to intervene again.

[Lady Hermon]

I am extremely grateful; it really is very generous of the Secretary of State to give way again. I am reading the legislation before us, which we are asked to give our consent to. Under the allocation for the Department of Justice, it says in black and white —I have not invented this—

“expenditure on activities that are required as a result of the United Kingdom’s exit from the European Union”.

As that appears to be expenditure on activities that are required as a result of Brexit, I have asked the Secretary of State how much has been spent. That is a clear question; I just want a clear answer.

[Karen Bradley]

There may be information on certain departmental spending, but, on the total, this is a number that is owned by NICS, not by the Northern Ireland Office, and I would not want to give the hon. Lady just one bit of the jigsaw. I would like to give her the full picture, including all the money that has been spent on preparations this year. On the allocations for the future, this is to enable the vote on account to happen, but actually the departmental allocations will be properly done, through a budget next year. In the same way as we had a budget Bill last July, which put the 2018-19 spending on a statutory footing, this is the completion of that process for 2018-19. Another Bill will do that for 2019-20. However, I will of course write to the hon. Lady and ensure that she has full information about all the spending across all Departments, because as I say, that information is held by the NICS; it is not owned by the Northern Ireland Office and I want to get it absolutely correct for her.

[Vernon Coaker (Gedling) (Lab)]

I think it would be very useful for the House to have the information that the Secretary of State just mentioned. Given that, regrettably, we do not have a functioning Executive and Parliament in Northern Ireland, it would be useful for the House to have the information that the civil servants have given her on why there should be a budgetary increase in individual Departments—such as Justice, Education or Health—so that we have some way of understanding in this House what the budgetary pressures are and what influences are leading to the decisions that the Secretary of State is making. I think that would be very helpful to us all.

[Karen Bradley]

The written ministerial statement sets out the departmental allocations. Those are the moneys that the permanent secretaries have asked me to deliver to them. I cannot direct the spending within those Departments. I also cannot ask them exactly which work streams or programmes they will spend the money on, because in this House we do not have the Executive power to do that. However, I am making it possible for the spending that has already happened to have the statutory footing that it needs, and I am making possible the vote on account for next year, as agreed with the permanent secretaries of each Department.

It is not a satisfactory process. I do not deny that this is not the ideal way to do it. The ideal way to do this would be to have Ministers in Stormont who are able to direct departmental spending and to have a budget process that is done in the same way as the overall budget is done for the United Kingdom in the Treasury; but we are not in a situation where that can happen, so unfortunately, this is where we are.

[Emma Little Pengelly (Belfast South) (DUP)]

rose—

[Vernon Coaker]

rose—

[Karen Bradley]

I will give way to the hon. Gentleman again, and then I will make progress.

[Vernon Coaker]

I am not trying to criticise. I am not complaining or saying that the Secretary of State is wrong. All I am saying is that, for example, her statement states that £16.5 million goes to the police for EU exit preparations. So, somewhere along the line, the police have decided that they would like those additional moneys to help. All I am saying, as somebody who takes a keen interest in Northern Ireland, is that with that, or with the schools, or with health, it would be helpful, as far as possible, to have some idea about the reasons that that money has been requested—not to criticise it, but just to understand it better.

[Karen Bradley]

I understand the point the hon. Gentleman makes. He has significant experience in Northern Ireland and will know a great deal about it. The police put in a specific bid for additional resources for Brexit preparations. It went through the proper processes in the Treasury and this has been paid. I recognise his frustration about wanting more information here for parliamentarians, and I have supplied the information I am able to supply in my capacity as Secretary of State. Clearly, we are not looking at the future spending and, when we do the budget for 2019-20—I hope we will not have to, as I hope it will be done by Ministers in Stormont—I will bear in mind the points he has raised.

[Emma Little Pengelly]

At which point will the Secretary of State accept that this is an entirely unsustainable position? As has been outlined, there is no scrutiny in this process. I do not believe that such a process would take place anywhere in a democracy in the western world. This process is taking place completely behind closed doors in terms of what bids are being put forward and what bids are being accepted. The people of Northern Ireland are in a difficult position; they are between two positions. The first is that Sinn Féin is boycotting the Northern Ireland Assembly, so we do not have the right mechanisms in place to scrutinise and make decisions. The second is that the Secretary of State and this Government are refusing to put in place direct rule, which, although not desirable, is necessary. We have now had several years of this type of process where there is no scrutiny and no democratic accountability. When is that going to change?

[Karen Bradley]

Of course, there is full scrutiny of the Northern Ireland block grant—that is the estimates process that we went through last week in this House; this House is able to scrutinise the block grant. I well accept the point the hon. Lady makes about the undesirable level of scrutiny and about how the allocations are made between Departments. I do not disagree with her on that. It would be much better to have the full scrutiny process that a devolved Executive would be able to deliver. We are in a very unsatisfactory position. I would rather we were not doing this in this way, but to ensure that public services continue to be delivered and that public servants—the civil servants in Northern Ireland—have the statutory underpinning they need for the spending, we are taking forward this budget Bill. I would really rather we were not.

[Gavin Robinson (Belfast East) (DUP)]

rose—

[Karen Bradley]

I will take one final intervention and then I will make some progress.

[Gavin Robinson]

The Secretary of State is right about the difficulty we are in because Stormont is not sitting, but that does not obviate the need for the process that this House should be engaged in. There is no need for this Bill be done through emergency procedures—there is no need for it to be fast-tracked. The explanatory memorandum says that the Bill is being fast-tracked because there was a hope that the Executive would have been restored to make the provisions. When in the past two months was there any genuine prospect of the Assembly being restored to go through this process? Our Committee stage is to be constrained this afternoon—we might get an hour or we might get 45 minutes on the Floor of this House. That is not satisfactory; we have the tools and the mechanisms in Parliament for full Bill Committee consideration of the estimates and future allocations. There was also the opportunity for the Select Committee on Northern Ireland Affairs to get into these discussions. The Departments are very good at appearing before the Committee chaired by the hon. Member for South West Wiltshire (Dr Murrison). We should have used those processes, rather than this constrained, fast-track process today.

[Karen Bradley]

I understand the hon. Gentleman’s concerns, but we have to be aware of the constitutional precedents that are set by changing the way we scrutinise these Bills. The way this Bill should be taken through is not as primary legislation; it should be an estimates process done in Stormont, in the same way as we vote on our Budget in this House. We do not have scrutiny of the Budget resolutions upstairs; we have a Finance Bill that puts them into legislation, but we vote on Ways and Means resolutions on the Floor of the House. Unfortunately, we do not have the ability to do that in Stormont, for well documented reasons. What I want is to see those politicians in Northern Ireland doing the right thing, coming back to Stormont and forming the Executive, so that all those proper processes can be applied. We should not kid ourselves that some substitute arrangement will offer a different approach; we have to see devolved government restored in Stormont.

[Sammy Wilson (East Antrim) (DUP)]

rose—

[Karen Bradley]

I know the right hon. Gentleman wants to come in, but I want to make some progress, because I am conscious that others want to speak and we want to make sure everyone has a chance to be heard.

Let me go back to the work we are doing today. Like last year, the draft budget sets headline allocations only. It will remain for Northern Ireland permanent secretaries to use the powers of this budget legislation and the draft budget position to take decisions to maintain public services and live within their means. Also like last year, the Bill does not propose any new moneys to be voted on for Northern Ireland. The totals to which it relates are either raised locally or have been subject to previous votes in Parliament, most recently in respect of the Supply and Appropriation (Anticipation and Adjustments) (No. 2) Bill, which has passed through this House and is now in the other House. Instead, the Bill looks back to confirm spending totals for 2018-19, to ensure that the Northern Ireland civil service has a secure legal basis for its spending in the past year. Taken as a whole, it represents the minimum necessary intervention to secure public finances at this juncture.

Let me turn briefly to the Bill’s contents, which largely rehearse what I set out to the House in spring last year when I introduced the Northern Ireland Budget (Anticipation and Adjustments) Act 2018. In short, the Bill authorises Northern Ireland Departments and certain other bodies to incur expenditure and use resources for the financial year ending on 31 March 2019—this month.

Clause 1 authorises the issue of £16.8 billion out of the Consolidated Fund of Northern Ireland. The allocation levels for each Northern Ireland Department and the other bodies in receipt of the funds are set out in schedule 1, which also states the purposes for which the funds are to be used.

Clause 2 authorises the use of resources amounting to some £20 billion in the year ending 31 March 2019 by the Northern Ireland Departments and other bodies listed in subsection (3).

Clause 3 sets revised limits on the accruing resources, including both operating and non-operating accruing resources in the current financial year. All are largely as they appeared in the Northern Ireland Budget Act 2018. The revised totals for Departments appear in schedules 1 and 2.

Clause 4 sets out the power for the Northern Ireland civil service to issue out of the Northern Ireland Consolidated Fund some £11.8 billion in cash for the forthcoming financial year. That is the vote-on-account provision that I have already outlined. It is linked to clause 6, which does the same in terms of resources. The value is set at around 70% of the sums available in both regards in the previous financial year. Schedules 3 and 4 operate on the same basis, with each departmental allocation simply set at 70% of the previous year, and clause 5 permits some temporary borrowing powers for cash-management purposes.

As I have already noted, all these sums relate to those that have already been voted for by Parliament, together with revenue generated locally in Northern Ireland. There is no new money in the Bill; there is simply the explicit authority to spend in full the moneys that have already been allocated.

[Lady Hermon]

May I record my serious disappointment that in the allocations we are going to approve today there appears to be absolutely no money at all set aside for the victims of historical institutional abuse? Will the Secretary of State confirm that the head of the Northern Ireland civil service, David Sterling, indicated that the Government would have a moral obligation, after the consultation on the Hart recommendations had ended, to bring the legislation through this House if the Assembly was not sitting? Will the Secretary of State honour that moral obligation to the victims of historical institutional abuse in Northern Ireland?

[Karen Bradley]

The hon. Lady has raised this issue on several occasions and I know how strongly she feels about it. I have met survivors of historical institutional abuse and what they went through is shocking. As she will know, the consultation the Northern Ireland civil service started is still open. Once that consultation has been completed and the recommendations from it are clear, we will consider them in the normal way. To reassure her, the vote on account that we are talking about is merely on 70% of the previous year’s spending. We are not doing anything in this Bill other than giving the Departments in Northern Ireland the ability to continue to spend money up to the level of 70% of the spending in the previous year. We are not directing them on how they spend that money.

[Sammy Wilson]

May I take the Secretary of State back to where she started, before she began going through the departmental allocations and the detail of the Bill? The whole point—it has been made time and again by Democratic Unionist party Members—is that there is no scrutiny of how the departmental allocations were reached. She is right that that scrutiny would normally be done through Stormont, but Stormont is not operating. A mechanism is available here, but there seems to be reluctance to use it because of the possible reaction from Sinn Féin. Not only is Sinn Féin stopping scrutiny in Stormont; the fear of how it will react is stopping scrutiny here. When will the Secretary of State realise that Sinn Féin cannot block the scrutiny of how money is spent in Northern Ireland by keeping the doors of Stormont shut and causing fear here about how it may react when we try to do the job in this place?

[Karen Bradley]

I know how strongly the right hon. Gentleman feels about that point, which he has raised on several occasions. He will know that we consulted on the process with all five main parties in Northern Ireland, with the Opposition and with the Northern Ireland Affairs Committee to allow some prior scrutiny of the figures. All parties had full sight of the figures that we published in last week’s written ministerial statement. He is absolutely right that normal scrutiny procedures are not in place—they will be in place only with the restoration of devolution—but I caution him against trying to create artificial scrutiny processes that might well set a precedent for the future across all the devolved nations. The right scrutiny processes are available to respect the constitutional arrangements across the whole United Kingdom and all the devolved Administrations.

Civil servants are taking decisions—not major policy decisions, but the decisions that the Northern Ireland (Executive Formation and Exercise of Functions) Act 2018 enables them to make and that we want them to be able to make. We have to be very careful about the civil service’s separation and independence from scrutiny by political masters. It is the political decisions that need scrutiny, not the decisions of civil servants. We would like to see Departments given full scrutiny in Stormont, as happens in this House, but we have to be very careful about the constitutional arrangements.

That brings me back to my point that the Bill would ordinarily have been taken through the Assembly. Clause 7 therefore includes a series of adaptations that ensure that, once approved by both Houses in Westminster, the Bill will be treated as though it were an Assembly budget Act. That will enable Northern Ireland public finances to continue to function, notwithstanding the absence of an Executive.

Alongside the Bill, I have laid before the House, as a Command Paper, a set of supplementary estimates for the Departments and bodies covered by the budget Bill. Those estimates, which have been prepared by the Northern Ireland Department of Finance, set out the breakdown of resource allocation in greater detail.

[Jess Phillips (Birmingham, Yardley) (Lab)]

When I was over in Northern Ireland recently, I realised to my horror that childcare is not widely available there, as it is in GB. People told me that some money had previously been allocated for childcare, but it seems that all the money for education, early years and childcare in the Bill is being allocated towards equal pay claims rather than provision to help women go to work, so this is a cracking day for women in Northern Ireland. To go back to the scrutiny conversation, the details seem to be very cloudy about where the previous money has gone and why there is no childcare in Northern Ireland. Could the Secretary of State answer that point?

[Karen Bradley]

This is a very technical Bill to put on a statutory footing the moneys that we have already voted through the House or that have been raised locally. The departmental allocations that the hon. Lady questions are in line with the advice that I have received from permanent secretaries about the moneys that they need. How they spend that money is for them to determine, based on previous decisions of the Executive and on the previous draft programme for government. That leads to perverse outcomes: things not being as we would like them to be in Northern Ireland, differences in Northern Ireland and the end of programmes that we might otherwise have wanted to continue. Without a Minister to direct them, those programmes finish. The answer is devolved government in Stormont. That is the way in which there will be proper scrutiny and proper political accountability, and there is no alternative.

[Emma Little Pengelly]

In Northern Ireland, we have a childcare strategy called Bright Start, and a significant amount of money was allocated to each of its themes and actions. I concur with the hon. Member for Birmingham, Yardley (Jess Phillips) that we do not have the 30 hours’ free childcare; the Department of Education in Northern Ireland was supposed to work on that. This illustrates two issues. First, we do not know what further allocations are being made under the childcare strategy. There has been no information on that thus far, and nor has there been any information about whether those allocations were bid for. Secondly, there cannot be a decision about 30 hours’ free childcare, despite all the work in the Department, because there is no Minister to take that decision. Sinn Féin are boycotting the Northern Ireland Assembly, so we cannot make the decision there. Will the Secretary of State please step up and start making those kinds of decision for Northern Ireland?

[Karen Bradley]

As I have said, there is no good alternative for the people of Northern Ireland other than the politicians that they have elected making the decisions on their behalf in Northern Ireland, fully scrutinised and fully accountable to the people who elected them. There is no alternative, and that is why we want to see politicians back in Northern Ireland. [Interruption.] I can hear my right hon. Friend the Member for Hemel Hempstead (Sir Mike Penning) making noises from a sedentary position.

[Sir Mike Penning (Hemel Hempstead) (Con)]

I was moaning, as usual.

[Karen Bradley]

I do not believe that my right hon. Friend is capable of moaning.

[Sir Mike Penning]

On that point—[Laughter.]

[Karen Bradley]

As hon. right and hon. Members will note, this is a different process from that which we might ordinarily see for estimates at Westminster, whereby the estimates document precedes the formal Budget legislation and is separately approved. That would also be the case at the Assembly. If it is Westminster that is passing the main Northern Ireland budget Bill later in the year, that Bill would contain modifications to the Government Resources and Accounts Act (Northern Ireland) 2001 to reflect the departure from the usual process.

As I hope hon. right and hon. Members will agree, this is very much a technical step that we are taking as we approach the end of the financial year. It provides a secure legal footing for the Northern Ireland civil service and demonstrates that this Government will uphold our responsibilities to the people of Northern Ireland.

As I conclude, I will set out once again a point that I have made several times before to this House. The UK Government are steadfastly committed to the Belfast agreement. Legislating on Northern Ireland budgetary matters at Westminster is not a step I want to take; nor is it one I want to take again. I am determined to restore the political institutions set out in the 1998 agreement and its successors at the earliest possible opportunity.

The people of Northern Ireland have now been without a power-sharing devolved Government for over two years. They need their representatives back in Stormont, taking decisions on the issues that matter to them. I know that an agreement to restore the Executive is achievable. I met the party leaders of the five main parties on 15 February at Stormont House, and I spoke to them again last week to discuss a further period of intensive talks to restore the Executive. In those discussions, all parties bar one—which was not able to meet me, rather than anything else—reaffirmed their commitment to a restored Executive and said that they wanted to continue to work towards that aim. I am absolutely determined to bring this about, and that is my focus and priority. I will do everything I can to support parties in coming together to find an agreement that can restore the power-sharing devolved government that is so needed. In its absence, this Bill is a reminder that the UK Government will always uphold their responsibilities for political stability and good governance in Northern Ireland, and I commend it to the House.

--- Later in debate ---

[Tony Lloyd]

My hon. Friend makes a similar point about the lack of transparency to that which has already been made by a number of Members, including the hon. Members for Belfast East (Gavin Robinson), for Belfast South (Emma Little Pengelly) and for East Antrim (Sammy Wilson). They are right to make that point.

Any local authority would have a far more dignified debate than the one we are having today about the length of time involved and the capacity to scrutinise. The Secretary of State says that we would create a new precedent were we to change these things, but we are in very different circumstances because we do not have direct rule and we do not have a functioning Stormont structure. We are already in unprecedented terrain, and we have to find ways to make sure that transparency and scrutiny are done far better.

There are specific questions I want to come on to, but it is probably worth making the point that a lot of people in Northern Ireland are already concerned about the lack of engagement with the budgetary process. I know that they are not represented in this House, but I want to quote the Ulster Unionist party’s finance spokesman, Steve Aiken, who said:

“It’s a disgrace…that the NIO handled the engagement on next year’s budget so appallingly. The Secretary of State said in her budget statement that she has discussed the budget situation with the political parties—she has not. Tokenistic efforts do not constitute actual engagement.

Over the last ten days there have been three NIO budget meetings. The first ended in farce as the political parties were asked to consider options without being told what those options were, the second ended with only minimal information provided, and the third—just two hours before her statement was published—lasted minutes with again only bare information provided.”

That is not good enough to reassure the wider public or even people in this House that the process is transparent and accountable or has any processes for scrutiny. They simply are not there.

I have some specific questions and I hope that the Minister of State will pick up on them in his response. The Secretary of State said that this was retrospective, and of course not all of it is, because it sets out the budgetary headings for the coming year. It is important to recognise that. There is a real question. If Stormont were to begin to operate again at the beginning of April, would this budgetary process be transferable and amendable by an elected Stormont? Would it be able to change the budgetary headings?

[Karen Bradley]

That is absolutely the case. The shadow Secretary of State is absolutely right. The Bill puts on a statutory footing the spending that has already happened and that which will happen in the next three weeks up to the end of March. It also allows for a vote on account of 70% of the previous financial year’s spending in the following year’s spending, but nothing about this budget puts on a statutory footing any of the departmental allocations as set out in the written statement. That has to be done in a separate piece of legislation, which we hope will be done at Stormont. It could be amended and changed at Stormont, as seen fit by Ministers in Stormont.

[Tony Lloyd]

I very much welcome that reassurance. Will the Secretary of State also consider this point? The frame of reference in previous budgets is that 45% of the spend has been moved forward. That would take us up to September, roughly. This year, unusually, the Secretary of State has put in 70% of next year’s spend. That speaks to the point raised by the hon. Member for Belfast East, who made the legitimate point that there is no emergency. The original ambition was to put this through using emergency powers, but there is no emergency whatsoever. This could have been done at any other time, whether in March, April or May—well, the retrospective part cannot, but the part for next year could be.

[Karen Bradley]

It is probably helpful if I clarify that point. We have to put on a statutory footing, by the end of March, the spending for the financial year 2018-19—the year we are in. That is what we are doing. The vote on account of 70%, rather than the 45% we did last year, is because of the recognition of the pressures on the Departments in Northern Ireland as a result of having no Ministers, and because we have additional moneys coming through. If an infrastructure decision is taken, money will need to be spent. What I did not want to do was constrain Departments to be legally able to have only up to 45% of the previous year’s spending. The 70% reflects the fact that, because there are no Ministers and because of the unique circumstances in Northern Ireland the fact that there may well be decisions on infrastructure and on other issues that may require accelerated spending in a Department, I wanted to provide flexibility so we do not have to come back sooner and bring forward the legislation required to put that on a statutory footing for the next year. We will of course have to do that at some point; what we hope is that it will actually be done in Stormont.

[Tony Lloyd]

I think the Secretary of State is confirming that this is not an emergency and that the procedures to allow everything to be forced through so quickly are not absolutely necessary. The different parts of the Bill—the retrospective definition of what was legal spend and the anticipatory spend for next year—could have been separated. The second most certainly could have been done more slowly. There could have been capacity for much greater and lengthier scrutiny of those processes. That is important. The suspicion about the 70% is that it anticipates that there will not be an Executive or an Assembly back in operation. It allows the situation to ride over and ride over. The concern is that there is no ambition to see the restoration of Stormont.

[Karen Bradley]

I am sorry to intervene on the hon. Gentleman again—he is being very generous with his time—but I just want to be absolutely clear on the record: this has nothing to do with a timetable around the restoration of devolution. It is recognising that last year we were under pressure to introduce, before the summer recess, the Northern Ireland Budget Bill for 2018-19. We did that in July—I think in the last week of July—to put it on a statutory footing, because there was a risk that if we had not done so, some Departments would have run out of the ability to spend money over the summer recess. There would have been no legal basis for spending on schools, hospitals and so on. The reason for the 70% is that, in the absence of Ministers and with additional spending pressures on Departments, I do not want us to be in a position where we are urgently having to take that legislation through here again. I would much rather we gave civil servants the comfort they need. I accept that it is unusual, but I assure the hon. Gentleman that it is nothing to do with the timetable around devolution.

[Tony Lloyd]

I am grateful to the Secretary of State for that assurance.

On a different issue, the Secretary of State’s colleague, the Communities Secretary, made it clear that the stronger towns initiative would extend to Northern Ireland, and hon. Members from across the Chamber will welcome that. However, given that it is a UK Government initiative, it is not clear how the decision-making capacity will be implemented. It is important that people can make decisions. It would be farcical if money were gifted to Northern Ireland—I do not know whether it would be Barnettised—but were not spendable because nobody can made a decision. [Interruption.] I am glad to see that the Secretary of State is considering that proposition.

Some have claimed that the £140 million is new funding that has resulted from the political pressure that Northern Ireland parties have put on central Government, but it is important that I repeat what the Secretary of State has already confirmed. Although it is new funding, and is welcome for that reason, it is actually a result of the lack of opportunity for more fundamental service reconfiguration, as she said. In other words, it is money for failure. The problem with that—the House must look at this very closely—is that my constituents, the Secretary of State’s constituents and the constituents of all Northern Ireland Members are paying for it. That is unacceptable. It is a tariff resulting from the failure of the political process. Once again, we come back to the recognition that, because there is no Stormont Assembly, we are all paying the cost in worse services, financially, and in the erosion of democratic values.

We do not intend to divide the House on budgetary items. It would not be appropriate do so because they give permission to spend or are the legal ratification of spending processes. However, this shakes us all to say that there must now be real effort put in to restoring Stormont. I have never doubted the Secretary of State’s sincerity in wanting to see Stormont restored, but I doubt the Government’s capacity. That is the real issue that divides us. I repeat what I have said previously: if the Prime Minister is so preoccupied with Brexit that she has no time to look at devolution to Northern Ireland, that is a fundamental political mistake that we will rue in time to come. We need ambition. Those talks must take place, and the Government in Dublin must be involved.

Some time ago, when I arranged the British-Irish Intergovernmental Conference with the Secretary of State, she said:

“I remind him that that body has met twice in the past 12 months.” —[Official Report, 13 February 2019; Vol. 654, c. 906.]

That is true, and those occasions were the first in 145 months. That is not acceptable.

[Karen Bradley]

It is worth putting on the record the fact that the last time the British-Irish Intergovernmental Conference had met was in 2007. Clearly, although the institutions were running and Stormont was fully running with full power sharing, the appropriate east-west conversations could happen through other bodies. It is clear that that has happened, but it is a consequence of Stormont’s not operating and there needing to be a forum for east-west communication.

[Tony Lloyd]

As the Secretary of State knows, I have asked for the BIIGC to be convened regularly. Back in the day, it sometimes met three or four times a year, particularly in the days of direct rule, when there was an ambition to get us back to a functioning Stormont. I have asked her in the past when it will meet again. Those meetings need to be timetabled and put on a regular basis so that we know it will meet and continue to be an active partner with the British Government in achieving the ambition of a restored Stormont.

I am aware that I have spoken for some time—I have given way a lot—and although we have the time, as the right hon. Member for Hemel Hempstead reminded me, it is probably time I devoted it to other people.

--- Later in debate ---

[The Minister of State, Northern Ireland Office (John Penrose)]

Let me pick up from where my opposite number, the hon. Member for Bristol South (Karin Smyth), left off and say that I am pleased to hear—from, I think, everyone—that there is limited opposition to the Bill and that Members are willing to support it on a cross-party basis. That is incredibly welcome. This is perhaps an unusual example of cross-party unanimity and consensus; there have been some pretty stroppy debates in the last couple of weeks on a variety of subjects. It is lovely to be here on a day when agreement is breaking out across different parts of the House.

However, I do not want to overstate that degree of cross-party consensus and agreement because what was also widely shared was a sense of frustration. There was frustration at the lack of a Stormont Executive—we heard that from pretty much every speaker this afternoon—and inevitably, because it matches that lack of a Stormont Executive, frustration at the limits of the Bill. As we have heard repeatedly, the Bill is there to keep the wheels turning in Northern Ireland, but not to bring about much-needed reforms, because those reforms require a functioning Stormont Executive. We have also heard repeatedly a litany of things that are either not being done and need to be done, or are not being done as efficiently as they could be, simply because there is not the political air cover in Stormont that would enable much-needed decisions to be made to change what is happening.

I echo many Members—including the Chairman of the Northern Ireland Affairs Committee, my hon. Friend the Member for South West Wiltshire (Dr Murrison)—in saying that that is no criticism of the civil servants in either the Northern Ireland civil service or the Northern Ireland Office. They are honour bound to make decisions based on the last set of policy decisions available to them, some of which are two or three years old. They must try to draw a line between those policy decisions and remain true to them.

[Vernon Coaker]

May I repeat what I said earlier? I agree with what the Minister is saying and this is not meant to be critical. I accept that, given the lack of a devolved Administration in Northern Ireland, we cannot scrutinise the decisions of civil servants. May I, however, ask the Minister to reflect again on the fact that changes are being made in this budget on the basis of the advice of civil servants? While we may not want to scrutinise or criticise those decisions, no information is available to the House about why the changes should be made. Will he take on board what the Secretary of State has said and look again at what information is provided to the House so that we can base our decisions on more information than we have now?

[John Penrose]

I do take that on board, especially because I think that the hon. Gentleman was one of the last Ministers who had to deal with the issue of direct rule.

[Vernon Coaker]

No, I was not.

[John Penrose]

So I am giving the hon. Gentleman responsibilities that he never had to bear. Let me also mention to him that a Command Paper is currently available in the Library which gives a very detailed breakdown—it is well over an inch thick—of the way in which money has been spent in Northern Ireland during the financial year that is about to end. There is a huge amount of detail, but it is backward-looking. While it is helpful and, I am sure, welcome to all Members to ensure some degree of accountability, I think that all of us, including the Secretary of State, have agreed that we all hanker after a better process than this, but also that the fundamental and central problem is the lack of a functioning Executive in Stormont.

I was delighted to hear the shadow Secretary of State, the hon. Member for Rochdale (Tony Lloyd), clearly say that he did not think direct rule is justified at this stage. He is also right to say that, because of that and because of the shortcomings we have all been enunciating, there is a tariff for political failure at Stormont: I think that that was the phrase he used. The Chairman of the Committee quoted a reference to the “slow decay and stagnation” that is happening in Northern Ireland politics as a result, but rightly levelled the balance a little by referring to the restoration talks efforts made by my right hon. Friends the Secretary of State and the Prime Minister, and—again, rightly—was positive and full in his praise of both the Northern Ireland civil service and the NIO, and their unstinting efforts to do a professional job in an extremely difficult and increasingly challenging political environment.

[Sir Mike Penning]

Can I, in all fairness, challenge the Minister on the way he congratulated the hon. Member for Rochdale (Tony Lloyd) in relation to direct rule? If direct rule is not the answer today, when will it be and, if it is not the answer soon, why?

[John Penrose]

A number of Members have said today that they would regard it as a last resort. I agree because we have to be incredibly careful about what we wish for here. We have to be extremely cautious about the notion of starting to take the drug of direct rule because it very swiftly leads to a very difficult and very precarious political position. I say to my right hon. Friend that there is a process laid out in primary legislation passed by this House—the Northern Ireland (Executive Formation and Exercise of Functions) Act 2018—that says we have, first, five months and then, potentially renewable, a further five months in which to find a consensus and get an Executive re-established at Stormont. At that point, to answer his point about “If not now, when?” there are statutory obligations on the Secretary of State for Northern Ireland that will require decisions to be made at those various different waypoints, but it is extremely dangerous and extremely difficult for us all to prejudge, or indeed to wish that those talks, stuttering though they are, but attempted though they definitely are, should not be given enough time to come to a sensible conclusion. I think everybody has been clear that that is what we want them to do; we want them to be successful if they possibly can be.

The SNP spokesman, the hon. Member for Paisley and Renfrewshire North (Gavin Newlands), was of the same mind. He spoke about a paralysing political stalemate in Stormont that must not become the new normal, and I agree.

[Lady Hermon]

I am sure I am not the only one who blinked and drew breath when I heard the Minister use the words “the drug of direct rule.” Perhaps I misheard him, but I will give him the opportunity to pick a more appropriate noun to describe direct rule.

[John Penrose]

It was certainly not my intention to cause the hon. Lady to draw breath. The point I was trying to make is that direct rule is potentially extremely dangerous and can lead to a very difficult political situation if we are not all collectively very careful. It is not a step to be taken lightly, simply or frivolously at all.

[Tony Lloyd]

In agreeing with the Minister, it is probably worth pointing out that the last period of direct rule lasted five years. This was the total antithesis of the ambitions of the devolved Administration.

[John Penrose]

I strongly agree and I think there has been pretty much unanimous agreement across the House during this debate about that point.

[Sir Peter Bottomley (Worthing West) (Con)]

Essentially, what the House understood by the Minister’s first remark and his reformulation is that short-term temptations can lead to situations that are adverse and undesirable.

[John Penrose]

Indeed.

The hon. Member for Strangford (Jim Shannon) had a long list of local projects that are not happening and that he thinks could and should happen were there to be proper government led in Stormont, and so did the right hon. Member for East Antrim (Sammy Wilson); he had a list of all sorts of missed opportunities—everything from mining to tourism was mentioned. Both of them had some interesting suggestions, which I will take away rather than react to now, about how we might perhaps exert more pressure through potentially changing rules in Stormont. I will treat them with the care with which they were offered, I am sure.

The hon. Member for East Londonderry (Mr Campbell) was passionate in saying that Northern Ireland is on the cusp of a breakthrough—the economic performance and indeed the social cohesion in Northern Ireland are out-of-sight better than 10 or 20 years ago—but that it is being frustrated and that further progress could be made, but we are caught. I think he said that the governance of Northern Ireland is neither fish nor fowl—it is neither London nor local—and should this be solved, that would make a huge difference.

My opposite number, the hon. Member for Bristol South (Karin Smyth), spent some time talking about important issues to do with public services—health transformation budgets, for example—and how that money could be used to make some of the changes, because they were already agreed in policy before the Stormont Executive changed. But she was also right to point out, as others have done, that the amount of transformation that can be done is limited by the political constraints that everybody here has been describing.

[Nigel Dodds (Belfast North) (DUP)]

On the issue of health transformation, the permanent secretary at the Department of Health has made it clear that £100 million went into health transformation funding last year and another £100 million will go in this year as a direct result of confidence and supply money. He has welcomed this greatly, because it gives us an opportunity to roll out multidisciplinary teams and other things that can actually save money. These are not insignificant amounts of money. They are substantial amounts that are going to transform the health service as a result of the confidence and supply deal.

[John Penrose]

The right hon. Gentleman is absolutely right. There is a significant transformation going on, and a significant amount of funds is going in to let that transformation happen, but it is also true to say that more transformation would be possible if there were political leadership as well. The civil service is limited not so much by the money at the moment; it is about the ability to take fresh policy decisions that would allow further progress to be made. That is the frustration under which we are all labouring during this Second Reading debate. On that basis, I plan to let us move on to consider the remaining stages of the Bill. I am delighted that there is cross-party consensus that it should proceed.

[Karin Smyth]

I am grateful to the Minister for giving way. In my remarks, I specifically asked, given the progress that the Government made on the Lord Chief Justice’s proposals, whether the Minister would give us an answer on progress towards having a medical school as part of Ulster University. The project is not only time critical but critical to the future provision of training places for doctors, particularly, in Northern Ireland, which would help to reduce the locum bill. We would be grateful for the Minister’s comments on that.

[John Penrose]

I shall respond swiftly, as I do not want to hold up the rest of the process. The hon. Lady is right to say that she asked that specific question. Let me make two comments in response. First, the judicial changes are not a Westminster Government decision. They are taken, rightly, by independent judiciary in Northern Ireland. Secondly, her question on the medical school needs to be addressed as part of the city deal discussions that are currently getting under way, and I would be happy to discuss that with local people and, if necessary, with her as well. With that, I propose to do something unusual for a politician: stop talking and sit down.

Question put and agreed to.

Bill accordingly read a Second time; to stand committed to a Committee of the whole House (Order, this day).