Northern Ireland Budget Bill

Lord Duncan of Springbank Excerpts

2nd reading (Hansard): House of Lords & 3rd reading (Hansard): House of Lords & Committee: 1st sitting (Hansard): House of Lords & Report stage (Hansard): House of Lords
Tuesday 14th November 2017 Lords Chamber

Moved by

[Lord Duncan of Springbank]

That the Bill be now read a second time.

[The Parliamentary Under-Secretary of State, Northern Ireland Office and Scotland Office (Lord Duncan of Springbank) (Con)]

As noble Lords will know, it is now nine months since there has been a properly functioning Executive and Assembly in Northern Ireland. Yet despite this Government’s efforts over the last 11 weeks, the parties have not yet reached an agreement that would enable a sustainable Executive to form. In bringing the parties together for this most recent phase of the political talks, we have sought to help the DUP and Sinn Fein to bridge the gap on a small number of outstanding matters, including language and culture. In doing so, we have worked closely with the Irish Government in accordance with the well-established three-stranded approach. We remain prepared to bring forward legislation that would allow an Executive to be formed should the parties reach an agreement.

I share my right honourable friend the Secretary of State’s strong preference to see a restored Executive in Northern Ireland taking forward its own Budget. The Bill before us is one that we are taking forward with the utmost reluctance and only because there is no other choice available. We have been clear that the passage of legislation to set a Budget should not be a barrier to negotiations continuing, but the ongoing lack of agreement has had tangible consequences for people and public services in Northern Ireland. Without an Executive there has been no Budget, and without a Budget civil servants have been without political direction to take decisions on spending and public services in Northern Ireland.

I join the Secretary of State in paying tribute to the Northern Ireland Civil Service, which has demonstrated the utmost professionalism in protecting and preserving public services throughout these difficult times, but the powers it has been exercising have their limits. Under Section 59 of the Northern Ireland Act 1998, and Section 7 of the Government Resources and Accounts (Northern Ireland) Act 2001, they may issue cash and resources equal to only 95% of the totals authorised in the last financial year. These powers do not allow departments to use accruing resources, meaning that the resources available to departments are in reality significantly less than 95% of the previous year’s provision.

Noble Lords will recall that in Written Statements by my predecessors, the noble Lords, Lord Dunlop and Lord Bourne of Aberystwyth, in April and July, the Government set out an indicative Budget position and a set of departmental allocations based on the advice of the Northern Ireland Civil Service. The 19 July Statement said:

“The exercise of S59 powers cannot be sustained indefinitely”,


and warned that although we had not then reached that critical point, it was approaching. Those resource limits, in the absence of a Budget, are now fast approaching. Without further action there are manifest risks that the Northern Ireland Civil Service would simply begin to run out of resources by the end of this month. That would mean no funding available for public services, with all of the negative impacts that would accompany such a cliff edge. No Government could simply stand by and allow that to happen. That is why we need the Bill.

To be clear, this is a measure we have deferred for as long as possible. We wanted to see the parties reach an agreement and take a Budget through themselves. In the absence of agreement, the Bill is necessary to keep public services running in Northern Ireland and, while it is a government Bill, it is not a UK government Budget. It does not reflect the priorities or spending decisions of the Secretary of State for Northern Ireland or any other UK government Minister. Rather, it sets out the departmental allocations and ambits that have been recommended by the Northern Ireland Civil Service, which, in turn, has sought as far as is possible to reflect the priorities of the previous Executive, albeit updated to reflect the changed circumstances as far as has been required. In short, it is the Budget that a returning Executive—had one been formed—would have been presented with. Taken as a whole, it represents a necessary measure, taken at the latest possible point, to secure public finances in Northern Ireland.

We should be absolutely clear that passing this Budget in Westminster does not mean a move to direct rule, any more than did this Parliament legislating to set a regional rate in April. Once the Budget is passed, the detailed decisions on how it is spent will be made by the Northern Ireland Civil Service. If the parties come together to form an Executive in the weeks ahead—as I am sure all noble Lords hope will be the case—those decisions would fall to them. Nothing we are doing today precludes talks from continuing and an agreement being reached.

I now turn briefly to the contents of this short but rather technical Bill. In short, it authorises Northern Ireland departments and certain other bodies to incur expenditure and use resources for the financial year ending on 31 March 2018. Clause 1 authorises the issue of £16.17 billion out of the Northern Ireland Consolidated Fund. The allocation levels for each Northern Ireland department and the other bodies in receipt of these funds are set out in Schedule 1, which also states the purposes for which these funds are to be used.

Clause 2 permits some temporary borrowing powers for cash management purposes. Clause 3 authorises the use of resources amounting to £18 billion in the year ending 31 March 2018 by the Northern Ireland departments and other bodies listed in Clause 3(2). These figures and those in Clause 1 supersede the allocations of cash and resources made by the Permanent Secretary of the Department of Finance up to the end of this month, under the powers I have already mentioned. Similarly to Clause 1, the breakdown between these departments and bodies and the purposes for the authorised use of resources under Clause 3 are set out in the Bill, in the first two columns of Schedule 2.

Clause 4 sets limits on the accruing resources, including both operating and non-operating accruing resources, in the current financial year. These sums relate to those which have already been voted by Parliament via Main Estimates, together with revenue generated locally within Northern Ireland. There is no new money in the Bill: there is simply the explicit authority to spend in full the monies that have already been allocated.

Ordinarily, the Bill would have been taken through the Assembly. As such, in Clause 5, a series of adaptations ensure that—once approved by both Houses in Westminster—the Bill will be treated as such, enabling Northern Ireland public finances to continue to function notwithstanding the absence of an Executive. Clause 6 repeals previous Assembly Budget Acts, relating to the financial years 2013-14 and 2014-15 respectively, which are no longer operative. Such repeals are regularly included in Assembly Budget Bills.

Alongside the introduction of the Bill in the other place yesterday, a set of estimates for the departments and bodies covered by the Budget Bill was laid before the House as a Command Paper. These estimates, which have been prepared by the Northern Ireland Department of Finance, set out the breakdown of the resource allocation in greater detail. As noble Lords may note, this is a different process from that which we might ordinarily see for estimates at Westminster, where the estimates document precedes the formal Budget legislation and is separately approved. That would also be the case at the Assembly. But in these unusual circumstances, the Bill provides that the laying of the Command Paper takes the place of an estimates document laid and approved before the Assembly, again to enable public finances to flow smoothly.

To aid the understanding of these Main Estimates and how the spending will break down, the Northern Ireland Civil Service has published a Budget briefing paper, which was published on the Department of Finance website on Monday morning. It is important to note that the Northern Ireland political parties have also been briefed on this Budget position.

As those clauses demonstrate, this is clearly an unusual Bill to be taken through the UK Parliament, marking as it does an approval by Parliament of spending in the devolved sphere. While being proportionate, the UK Government want to ensure that in the absence of an Assembly there can be appropriate scrutiny by Parliament of how the money it has voted is subsequently spent. In addition to the provision in the Bill for scrutiny by the Northern Ireland Audit Office of the Northern Ireland departments, my right honourable friend the Secretary of State will be writing to the Comptroller and Auditor-General for Northern Ireland asking for a copy of each of the NIAO audit and value for money reports produced after the Bill gains Royal Assent, which will contain the Comptroller and Auditor-General’s view on any shortcomings and his recommendations for improvement. The Secretary of State will ask the Northern Ireland Civil Service to make its responses to those reports available to him. Copies of these reports and correspondence will be placed in the Libraries of both Houses to allow scrutiny by all interested Members and committees.

I have already noted that the Bill deals solely with moneys already voted for by Parliament or raised within Northern Ireland. Those figures do not, though, secure the financial picture for the long term, where real challenges remain. There is a health service in significant need of transformation; there are further steps to take to build the truly connected infrastructure that can boost growth and prosperity throughout Northern Ireland; and there is a need to continue to deal with the legacy of the past. It was in recognition of those unique circumstances that the UK Government were prepared to make additional financial support available earlier this year, following the confidence and supply agreement between the Conservative Party and the DUP. That agreement made it clear that we wanted to see that money made available to a restored Executive, which would decide on a cross-community basis how best to use the funding for the benefit of all in Northern Ireland.

Northern Ireland’s unique circumstances cannot simply be ignored in the meantime, especially given the pressures that we have seen in the continued absence of an Executive. So in addition to the Bill, this Government will commit to making available the £50 million in the agreement for addressing immediate health and education pressures in this financial year. Those sums are not contained in the Bill, because they have not yet been voted by Parliament. If the Northern Ireland Administration confirm their wish to access them, they will be subject to the full authorisation of the UK Parliament, as with all sums discharged from the UK Consolidated Fund, via the estimates process in the new year. From there they will be transferred, along with other sums forming part of the Northern Ireland block grant, into the Northern Ireland Consolidated Fund.

In the absence of an Executive, it would be for the Northern Ireland Civil Service, which is bound by a range of equality and propriety duties, to make the decisions as to whether and how to take account of this funding for the benefit of the whole community. We want to see a restored Executive back in place and deciding on how the additional financial support can best be used for the benefit—I stress again—of the whole community. That remains the case now, as much as it ever was. We believe in devolution. We want to see locally elected politicians taking the strategic decisions about the future direction of their local areas.

In this context, I know the disappointment so many feel that despite the election more than eight months ago, there remains no functioning Assembly in which all those elected may serve. The Government understand the concerns that many have that full salaries continue to be paid to Assembly Members, despite this impasse, but we also recognise that many of those elected have been desperate to serve since March and have continued to provide valuable constituency functions in the meantime. That is why my right honourable friend the Secretary of State told the House of Commons yesterday that he is seeking independent advice on the subject from Mr Trevor Reaney, a former Clerk of the Northern Ireland Assembly. Mr Reaney has agreed to provide an independent assessment of the case for action and the steps he would consider appropriate. He will report to the Secretary of State by 15 December and his advice will help inform the best way to proceed.

I very much hope that his work will not be needed. That is because I still hope that the parties can resolve their differences and an Executive can be formed—an Executive that will come together and take the strategic decisions needed on health transformation, educational reform and building world-class infrastructure to deliver a better future in Northern Ireland. That is what the people of Northern Ireland voted for and want to see. We will continue to work with the parties and support them in their efforts to reach a resolution for, together with the Irish Government, we remain steadfast in our commitment to the 1998 Belfast agreement and its successors, and to the institutions they established.

It remains firmly in the interests of Northern Ireland to see devolved government restored and locally elected politicians making decisions for the people of Northern Ireland on key local matters. Northern Ireland and its people need a properly functioning and inclusive devolved Government, along with effective structures for co-operation—north-south and east-west. At the same time, the Government are ultimately responsible for good governance in Northern Ireland and we will do whatever is necessary to provide that. The Bill is a reminder of the underlying obligation that we will continue to uphold and I beg to move that it be read a second time.

--- Later in debate ---

[Lord Duncan of Springbank]

I thank noble Lords very much for their contributions this evening. It has been a wide-ranging discussion, at the heart of which has been a consensus and a recognition that, as my noble friend Lord Trimble said, it is only a matter of days before the money begins to run out. Let that be the focus of our endeavours today. It is important—indeed, it is vital—that the money does not run out, and I welcome the support for this Bill from across the entire House. However, that is only the beginning of the story that we have heard this evening.

A number of the points that have been made resonate particularly strongly. The first came from the noble Lord, Lord Browne: progress has been made and we have had stable governance for almost a generation. That is the ultimate prize—stable and sustainable government, not just for one generation but for all generations. That must be our driving force.

I was also struck by the words of the noble Lord, Lord Murphy: direct rule is not a solution; it is a tragedy. I think we all recognise that we wish to see the formation of an Executive who are stable and sustainable and who can deliver on the very issues that many noble Lords have flagged up concerning education, health and elsewhere. We need these decisions to be taken by people in Northern Ireland. That is critical and absolutely essential.

I noted too the words of the noble Lord, Lord Empey, who said that it is easy to walk down the steps of Stormont but hard to walk back up them. Let that be our watchword today. If we do indeed stumble down those steps from Stormont, it could well be a generation before we are able to climb our way back up to where we need to be, which is in peace and certainty delivered by the Government of Northern Ireland for the people of Northern Ireland. Let us be under no illusion about that. Again, the noble Lord, Lord Empey, was very clear when he pointed out that, when the Belfast agreement referendum took place, over 70% of the people supported it. That is what the people want—again, let us be under no illusion about that.

The noble Baroness, Lady Suttie, set out very clearly that there are serious issues in Northern Ireland that must be solved. This evening we heard tributes from a number of noble Lords for the Civil Service in Northern Ireland. The word “integrity” was used, and it is right that we use it. We are placing upon its shoulders extraordinary pressures. As many have pointed out, the Civil Service cannot be held to account as a politician can be, and we cannot lose sight of that. As each of those civil servants seek to plot the trajectory of the Budgets from the last outgoing Administration, we must not fail to recognise how difficult that becomes the further you move from that moment. It is almost impossible to conceive of this state of affairs lasting. It cannot last. We are asking too much of that Civil Service. That is why we come back again to the central point that we have all acknowledged this evening: that out of these talks must emerge a certainty that gives a sustainable Executive that can deliver each of these items in Northern Ireland itself.

It is important that we recognise some of the particular elements that were raised tonight. Noble Lords will have noticed that I had to write a number of notes and send them off because I did not have all the answers. That is a reminder of how important it is to make sure. I hope, therefore, noble Lords will forgive me if there are occasions when I cannot respond adequately tonight. I will do so in writing, because it is important.

Let me touch upon some of the other points that are important for us to draw out. I am reminded of what the noble and right reverend Lord, Lord Eames, said. Peace in Northern Ireland is the ultimate prize but as we have witnessed over the last few days, and as a number of other noble Lords have pointed out, peace is not at the heart of everyone. There are some who would seek to undermine it and pull it down. We saw in Omagh a reflection of the very worst of the horrors that could engulf Northern Ireland. As the noble Lord, Lord Murphy, pointed out, if there is a vacuum, we do not know what will fill it. I return to my noble friend Lord Trimble, who recognised that what has to fill that vacuum is democracy. At heart, it has to be democracy, which recognises that the most important thing facing the people of Northern Ireland is a good health service, the right education and the ability to retire in peace and comfort—the things that we all wish for, whether we are in Northern Ireland, Scotland or elsewhere. Democracy must fill that vacuum. If it does not, we will consign a generation to the horrors that many here have lived through first hand and have seen devastate that Province. That is not the ambition of the UK Government.

It is important that I refer to some of the points brought up by the noble Lord, Lord McAvoy. I begin by saying that I welcome his support. He made a series of key points, including the question of an independent chair and round-table talks. Let me be frank: nothing is off the table right now. We cannot afford to consign anything to “off the table” because we are at an impasse. Whatever gets us moving is on the table. I assure him that we will not overlook any element.

It may be that we need to look at some of the larger statements that need to be made around transparently making recognisable offers—not concessions—to move things forward. That will not be easy. If it was easy, it would have been done by now. We are at the twilight moment. As the candle flame begins to flicker, we have an opportunity now still to make those moves. That must be done. I am conscious that, if we fail to do so, the opportunity may not arise again for a generation and we shall be engulfed in darkness.

I turn, then, to the question of scrutiny. As we go forward, there will be challenges for the Northern Ireland Civil Service, as I have acknowledged. There may be a role for an Assembly to examine in different ways how we might move this forward. As I said, nothing is off the table. If we can move things forward then let us get moving.

There are challenges. I appreciate that some may believe that the Prime Minister has not been active, but I can assure noble Lords that she has, and that she will continue to be, as we all must be, to make sure that no stone is left unturned as we seek to secure the outcome that I believe all in this House so desire. I am aware that it will not be easy, but as my noble friend Lord Maginnis rightly points out, there is knowledge in this House that must be drawn upon. We cannot turn our back upon it. Too many people here have lived through the realities and too many people here have been part of the change—those who have made that difference. Here, I acknowledge the work of my noble friend Lord Trimble, who has moved so much from where he began his journey to where we are now: moving towards, I hope, a recognition that we cannot simply start and stop but must see progress being made.

I should say in passing that I would not have believed that my noble friend Lord Maginnis is 75. He clearly has aged rather well.

On some of the more serious points raised, there is the question of the paramilitaries. There are notable achievements in this area. The establishment of the joint Paramilitary Crime Taskforce, featuring the PSNI, the NCA and HMRC, is an important step in that direction. It is testament not only to the priority we attach to this issue but to the importance of working closely together to tackle it. However, there are elements of it that I would like to put in writing, if I may, because they require a more detailed explanation. I have received a note from my advisers which simply says that on occasions it is very technical. Where the issues are very technical, I hope your Lordships will forgive me and allow me to write with technical answers. I do not want to mislead noble Lords in any way with my appreciation of this handwriting, which is quite difficult to read.

On the challenges, the noble Lord, Lord McAvoy, has put his finger on one aspect: the perception. This is not only about the reality; sometimes it is about the shadow and not only the substance. We must recognise that the eyes of the world are on Northern Ireland now. The peace process has been used as a bastion and a guide in many other trouble spots around the world, and it is important that people can see that every possible effort is made as we go forward.

I can assure noble Lords that the reason we have moved in this particular fashion today and yesterday—seemingly, if you like, at the last possible minute—is that we believed that every possible moment had to be given to the talks; not a moment could be spared. I hope noble Lords will forgive the somewhat last-minute element of this debate. It has not been our intention to withhold it but, rather, to give every opportunity to the people sitting around the table.

It is right that we recognise that the talks have reached an impasse and that we now ask ourselves what we can now do differently. We are where we are. That is why I come back to the notion—as other noble Lords have mentioned—that we need to think outside the box. We need to think anew and afresh because we cannot rely on what we have done in the past.

I recognise the comments made by several noble Lords about the importance of transparency. As much transparency as possible should be cast on the talks because the people of Northern Ireland need to know what is going on inside those closed rooms. There needs to be greater communication so that people understand what is going on. They know what is at stake and they need to know exactly what is being done to address that by not only the two large parties but by all concerned. It is not just the Assembly Members who have roles in Northern Ireland; we should look at the council level, which continues to operate in adverse circumstances and under the self-same challenges. I am very conscious of how important that is.

I turn to what the noble and right reverend Lord, Lord Eames, said about having spoken to one of the widows. That was the challenge and she was right to flag it up: politics needs to be about hope. There needs to be a belief that we are able to make progress, that compromises can be made and that the reach-out can be delivered. The very fact that the lady was a widow reminds us what happens when we fail to achieve progress. That is the level of risk we confront, as we have seen again in the device that blessedly did not take lives in Omagh. However, no doubt that vacuum could be filled by the very thing we do not wish to see.

I hope noble Lords will forgive me if I cut short my remarks with one final statement, which is that the Budget must be passed. I do not believe that direct rule is the right outcome for Northern Ireland, and I do not think that any of us here believes it. What must be assured for Northern Ireland is strong, stable and sure governance. The people of Northern Ireland deserve that and it must be at the heart of the discussions as they go forward. If it is not, we are going to enter that period of darkness.

I am aware as I conclude my remarks, given that language has been a part of our discussion, that it might be appropriate to repeat a line from the Scottish poet Robert Burns. He is talking about fleeting moments, those moments which can simply disappear:

“Or like the snow falls in the river,

A moment white—then melts for ever”.

That is where we are today: the fleeting moment as a snowflake hits the water. We have to recognise that now is the time and this Budget is necessary, but the next step is all the more necessary. The future of Northern Ireland must be decided by a strong and stable Executive, elected by the people of Northern Ireland and focused on the issues that affect them from day to day. We must make sure that the Executive can make their lives better. On that point, I ask the House to give the Bill a Second Reading.

Bill read a second time. Committee negatived. Standing Order 46 having been dispensed with, the Bill was read a third time, and passed.