Social Security

Baroness Ritchie of Downpatrick Excerpts

Wednesday 14th September 2016 Commons Chamber

[Ms Margaret Ritchie (South Down) (SDLP)]

I thank the hon. Member for Blaydon (Mr Anderson) for outlining the position on welfare reform and the fact that it can be so pernicious in bringing about bad impacts on people already on a low income. I welcome the fact that the Minister for Employment is here today, as he has previously been in the Treasury. He has outlined this supplementary legislation.

My party has always been clear about our position, which is on the record both in this Chamber and in the Northern Ireland Assembly: legislation dealing with welfare reform should have been dealt with in the Assembly, as originally envisaged. Westminster’s interference in our devolved welfare arrangements was inappropriate, as were the subsequent fines. As a former Minister for Social Development in Northern Ireland for three years, I recall bringing forward “karaoke” legislation on welfare issues. Why should it have been different this time?

The Democratic Unionist party and Sinn Féin voted through the legislative consent motion in the Assembly to hand our welfare powers over to Westminster. Indeed, far from its original promises that no claimant would be worse off, Sinn Féin handed our welfare powers over to London to carry out its dirty work, while its Members do not even take their seats in this Chamber. The essence of devolution is to improve the lives of people in Northern Ireland, and devolution is damaged if the two largest parties in the Assembly and the Northern Ireland Executive pick and choose which powers they have and when they have them. People in Northern Ireland must be able to have confidence that the political institutions upon which we agreed in the referendum in May 1998, and the people and politicians involved, are serious about the powers they have and will fiercely defend any attempts to reduce them.

This legislation should have been a matter for the devolved Assembly, which should have resisted the Treasury’s interference and taxes on our devolved budget. Instead, the DUP and Sinn Féin were delighted to have the powers taken off their hands for some 13 months. My party made numerous attempts to build consensus on welfare reform as far back as 2010, both in the Assembly and in this House through my hon. Friend the Member for Foyle (Mark Durkan). He made those attempts when the original Welfare Reform Bill was going through the House—even before the issue came to the Assembly.

The Social Democratic and Labour party was always realistic about the implications of welfare reform and made the case for mitigation that was sustainable and would be included in the devolved budget. I can well recall a meeting we had with Lord Freud, then a Minister in the Department for Work and Pensions, where we outlined specific measures that would help to mitigate the impact of welfare reform in Northern Ireland. Surprisingly—or perhaps not so surprisingly—those mitigation measures areas were eventually to come about. We divided on the Bill last year and on the order when it came to this House in 2015.

I would welcome clarification from the Minister on another matter that is directly related to this order. My hon. Friend the Member for Foyle raised it last week. Clause 9 of the Finance Bill provides for the Treasury to ensure that

“no liability to income tax arises on supplementary welfare payments of a specified description”.

But it also makes provision for the Treasury to make regulations to

“impose a charge to income tax under Part 10 of ITEPA 2003 on payments of a specified description.”

The SDLP has been at the forefront of securing mitigating powers for the Assembly to enable it to make supplementary payments. Can the Minister confirm today that the clause does not give the Treasury the green light to interfere in decisions by the Executive and the Assembly on supplementary payments by dictating that those payments could be subject to a tax clawback? As he knows, such top-up welfare payments will be made from the Executive’s own devolved budget and will not come under annually managed expenditure, which is the usual route for the payment of benefits throughout Northern Ireland. In response to my hon. Friend the Member for Foyle, the Financial Secretary to the Treasury confirmed last week that the clause will not allow that. Can the Minister for Employment reconfirm that position?

As I said, the SDLP has worked to secure mitigation, and the passing of this order will be necessary to release the moneys for mitigation measures or supplementary payments, which we do not want to obstruct. For that reason, we will not push the House to a vain Division on the order today—I am sure some people will be pleased about that. Notwithstanding that, it is important to remember that welfare reform, and particularly the legislation upon which this order is based, will introduce pernicious measures into Northern Ireland and will have an impact on those with low income who are reliant on benefit. I fear that it could push people further into poverty. It is therefore incumbent on the Government to ensure that people are protected and that there is some form of cushion for them. I respect the fact that the mitigation measures will ensure that there is, but the Government must consider other measures to ensure that people can live decent lives.

Earlier today, the hon. Member for Belfast East (Gavin Robinson) initiated a debate on social fund funeral payments. The SDLP participated in that debate, because there is a feeling that those payments have been capped for several years and there has been no corresponding increase when the costs have exceeded the bounds of many people’s income. The Minister responding to that debate did not give us a helpful response about future DWP or Treasury measures to increase such payments. When we discuss welfare matters in relation to Northern Ireland, it is important that we take into account the special circumstances of the many people, particularly in urban areas, who find themselves unemployed, perhaps through no fault of their own, and are in receipt of benefits. They must have a financial cushion and protection in order to live their life without any detriment.

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[Sammy Wilson]

That was the problem. In his short intervention, my hon. Friend did not have the opportunity to explain what happened. We were not delighted that the powers were taken away from us, but because of the use of the petition of concern by the SDLP and others, the ability to bring legislation forward was blocked. We then faced a situation in which we could not bring forward our own bespoke Northern Ireland legislation because of the block.

[Ms Ritchie]

rose—

[Sammy Wilson]

I will give way in a moment, but let me just explain this, because it is important. Rather than being delighted that Westminster had taken responsibility, our party worked frantically to try to find ways of ensuring that the worst aspects of welfare reform—the ones that we believed were the most damaging and that, for structural reasons, could not be introduced in Northern Ireland—were dealt with by taking money from other priority areas. We used that money to alleviate some of the difficulties. That was blocked—stopped dead in its tracks—by the SDLP’s use of the petition of concern. We worked our socks off to try to get a bespoke arrangement for Northern Ireland, which could be agreed to by all of the parties and would therefore have some kind of democratic authority, but it was impossible to do that because of the actions of the SDLP. It protested that it wanted the legislation dealt with in Northern Ireland, but did its darnedest to ensure that it could not be dealt with in Northern Ireland and that it had to be dealt with here.

[Ms Ritchie]

Let me refresh the hon. Gentleman’s memory, as I fear that he and his colleagues may have forgotten what actually happened. My colleagues in the Northern Ireland Assembly proposed an all-party Committee as far back—[Interruption.] It is not flannel. It was proposed as far back as March and April 2011 to address this issue. We wanted to achieve all-party consensus so that we could go forward to the Treasury here in London as a united team to achieve the best possible deal for the people of Northern Ireland.

[Sammy Wilson]

I was the Finance Minister in Northern Ireland at the time, and I can remember those discussions. There was a whole list of demands. Basically, it was demanded that we should not introduce any of the welfare reform proposals and that we should just go ahead as usual. The important question was who was going to pay for it. There was a naive belief that if all the parties in Northern Ireland came to Ministers here in London, with the great and the good from Northern Ireland on their coat-tails, and pleaded a special case, we would somehow be exempt from the welfare changes that were being made in all other parts of the United Kingdom. That was the cunning plan. I am afraid that even those who were sympathetic to the SDLP’s point of view knew that nothing would come from it. Indeed, Baldrick could not have devised a more stupid plan had he sought to do so.

There is no point in saying that the SDLP tried to find ways of changing this; the only suggestion was that we should oppose the changes and say that we therefore did not want them for Northern Ireland. The more realistic position, and the one now reflected in the order, was to say that we should look at what resources were available, look at the most damaging aspects of the legislation and see whether we could find, within our own resources, the ability to mitigate some of them.

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[Sammy Wilson]

This is the amazing thing: I know there are all these attempts to rewrite history, but it was a DUP Minister who actually brought the legislation to the Assembly—who was prepared to walk through the Lobby and to vote for it. However, because a petition of concern was introduced by the SDLP, even if a majority of Members in the Assembly had voted for the legislation, it would still not have become law. Once that petition of concern was triggered and the legislation was turned down, we could not have any welfare reform Bill. That is the truth of the matter—not that we ran away. We faced up to things. I can remember doing interview after interview where we even faced flak from people who said, “You’re going to hurt individuals because of part of this legislation.” We argued, “At least we’ve done something to mitigate it. We have got the best possible deal.”

Can I just say that we did get changes and allowances made by the Department for Work and Pensions? I want to give credit to Ministers in the Department. When we were negotiating on welfare reform, they accepted that Northern Ireland could make changes, albeit that we had to accept the financial consequences of those changes. However, flexibility was demonstrated by the Department, although it was rejected by those who wanted simply to be able to say, “We are purer than everyone else on this issue. We have stood on our principles”—regardless of the consequences of that.

We have the legislation that we have today. Those who are most vulnerable in Northern Ireland have been safeguarded by the changes that have been made and by the resources that have been devoted to this issue by the Northern Island Assembly, and that has been a painful choice, because, of course, it means that there is less money to spend on other things.

[Ms Ritchie]

Will the hon. Gentleman give way?

[Sammy Wilson]

The hon. Lady had plenty of opportunity to make her point during the debate, and I have allowed three or four interventions already—I know she is struggling with the case that she has and with the embarrassment of the way in which the SDLP has handled this issue.

We now have this order. I recommend it to the House—it is the best deal we could possibly have got. Unfortunately, it would have been far, far better had it gone through the Assembly, but because of the Assembly’s structures and the ability of minority parties to obstruct legislation through a petition of concern, this measure was the only avenue by which we could ensure that the Assembly finances were protected and that the political process in Northern Ireland was able to continue.

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[Mr Dodds]

It is for Sinn Féin to explain its own position. It is not for me to speak for it, especially when its Members do not come to this House. Certain Members are often seen about the corridors. They are here to collect their allowances—their political representation money and their constituency office allowances—but that is all they do; they do not take part in any other parliamentary processes. I will therefore leave it to them.

The reality had to dawn on people in Northern Ireland that we were facing the collapse of the political institutions. It is a bit like a local council in England or Wales, or anywhere else, being told, “Here’s your financial settlement—here’s what you’ve got to work within,” and the leading party there saying, “Sorry, we’re not going to accept that. We’re going to set budgets that are way beyond that, we’re going to just ignore the financial realities, we’re not going to make any compromises which will safeguard the most vulnerable”—

[Ms Ritchie]

Will the right hon. Gentleman give way?

[Mr Dodds]

No. The hon. Lady had plenty of time to put her arguments to the House, and the fact that she was unable to put any convincing arguments is her responsibility.

In terms of financial responsibility, serious parties of government—parties that are serious about running countries and being in government—have to take difficult decisions within the financial parameters that they are set, especially in a devolved Government. If we simply say, “We’re not going to do that—we demand that you give us more,” it eventually leads to collapse.

Let us remember that the people of Northern Ireland had their say—

[Ms Ritchie]

Will the right hon. Gentleman give way?

[Mr Dodds]

No, no—the hon. Lady has had her opportunity to speak, and I am not giving way.

The people of Northern Ireland have had their say. There was an election in May in which they delivered their verdict on the whole social security debacle and on how the DUP and other parties had performed. The SDLP and certain other parties had their worst ever result in Assembly elections. The DUP was returned with one of its best results ever and is back at the head of government in Northern Ireland. The people of Northern Ireland saw very clearly what was going on. They recognised that parties and politicians have to face up to their responsibilities. If they are not serious about that, they will be rejected at the polls.

I, too, welcome this order. I wish the DWP Minister, who has moved from the Treasury, well in his work. I hope that we come to a point where we do not need such legislation to come to the Floor of the House of Commons and can get back to dealing with it in the Northern Ireland Assembly.