Northern Ireland (Welfare Reform) Bill

Lord Dunlop Excerpts

Tuesday 24th November 2015 Lords Chamber

Moved by

[Lord Dunlop]

That the Bill be now read a second time.

[The Parliamentary Under-Secretary of State, Scotland Office (Lord Dunlop) (Con)]

My Lords, I beg to move that the Bill be now read a second time.

This Bill is a fundamental part of the agreement reached last week after 10 weeks of intensive talks involving the Northern Ireland parties, the Secretary of State and the Irish Government. The talks resulted in an agreement called A Fresh Start: the Stormont Agreement and Implementation Plan. As part of this agreement, the Government are committed to bringing forward this Bill, which will enable it to legislate for welfare reform in Northern Ireland.

Noble Lords will be aware of much of the background to why this legislation is necessary, so I will not go into a great deal of detail now. In summary, while welfare is a devolved matter in Northern Ireland, it has in practice maintained parity with the rest of the United Kingdom. This parity principle has served Northern Ireland well. It means benefit claimants have been able to avail of the same rates of benefit as those in the rest of the United Kingdom, something that would not have been affordable if Northern Ireland had to support its own system.

However, over the past three years, the Northern Ireland Assembly has been unable to implement welfare reform legislation mirroring that of the Government’s Welfare Reform Act 2012. This has resulted in Northern Ireland’s welfare system being not just slightly different but fundamentally and structurally different from that in place in the rest of the United Kingdom. This difference is simply unsustainable. Once Great Britain moves entirely to the new system based around universal credit, Northern Ireland will no longer have access to the DWP computer systems on which it relies to assess and deliver people’s benefits. It would be left with no option but to devise, implement and maintain an entirely separate and more expensive system and meet the massive costs of the IT needed to support it. For a small devolved Administration, this would be prohibitive. Budgets for other departments would have to be cut very significantly to pay for it with an inevitable impact on front-line services and the capital spending available for crucial infrastructure, such as road improvements. This would undermine the credibility of the devolved institutions and would also do irreparable damage to the political relationships which are central to making them work.

This scenario was dangerously close to becoming a reality following the Assembly’s failure in May to pass its Welfare Reform Bill. On 26 May, the Bill passed its final stage with the backing of three of the then five parties in the Executive, but it was blocked by the other two parties using a device in the Assembly known as a petition of concern meaning that the legislation had to have cross-community support, which it failed to achieve. Northern Ireland’s devolved institutions were once again faced with almost complete deadlock and, by early autumn, it looked increasingly likely that welfare reform would bring down the Executive itself.

This is the context in which the agreement was reached and in which the Government have agreed to bring forward this Bill. The Bill provides the Government with a power to legislate for welfare in Northern Ireland via an order in council. The power provided is a broad power, for a number of reasons. In providing a broad power, the Bill allows the Government to implement various Northern Ireland-specific flexibilities and top-ups. In doing so, the Government are demonstrating that their intention is not to impose Great Britain’s welfare system on Northern Ireland. Instead, we are proposing to use the power provided by this Bill to legislate for the Northern Ireland-tailored welfare system agreed by the Northern Ireland parties. The order in council that will follow this Bill, if passed, will make this clear. The second reason for opting for a broad power in this Bill is that it enables the Government to help implement other welfare reforms, including those contained in the Welfare Reform and Work Bill currently being considered by noble Lords.

It is important to stress three important considerations at this point. First, this Bill does not affect the legislative competence of the Northern Ireland Assembly. In other words, if the Assembly can agree to do so, it can continue to pass welfare legislation. The Bill therefore creates a situation in which welfare is both devolved—meaning that the Assembly can legislate for it—and effectively reserved, meaning the Government can legislate for it. Secondly, the legislative approach outlined in this Bill has arisen at the request of the Northern Ireland parties. The Assembly last week granted its consent, by an overwhelming majority of 70 votes to 22, to this Bill. Thirdly, I assure the House that the UK Government have no intention or desire to legislate on an ongoing basis for welfare in Northern Ireland. This is why Clause 3 time-limits the power so that an order cannot be made after 31 December 2016.

In closing, I shall comment briefly on the speed at which this Bill is being taken through both Houses. I fully accept that what we are asking the House to do today is exceptional. I agree that taking all stages of a Bill through the House in a single day is not ideal and I fully understand that a number of noble Lords have misgivings about it. The Government would very much prefer not to have to take this approach. I can assure the House that the Government are fast-tracking this legislation only because we view it to be absolutely necessary in this specific case; necessary to ensure that welfare reform is no longer an issue undermining the political process in Northern Ireland; necessary to implement the agreement that was reached at Stormont last Tuesday; and necessary to underpin the stability and survival of the power-sharing devolved institutions at Stormont.

If we do not get this legislation on to the statute book and continue with the implementation of last week’s agreement, there will be a very serious risk that devolution will collapse, leading to a return to direct rule. A resumption of direct rule would inevitably mean many items of long and complex primary legislation being taken through by order, month after month. This would mean not only denying such legislation scrutiny in the Assembly but would also inevitably take up large amounts of parliamentary time. The Government’s approach may be unconventional, but it does have the cross-community support of a vast number of Northern Ireland’s elected representatives. This is a Bill which will help resolve the long-running, politically divisive stalemate over welfare reform. It is a crucial element of establishing and building upon the fresh start announced last week and it offers the only realistic prospect of resolving Northern Ireland’s welfare reform impasse. I beg to move.

--- Later in debate ---

[Lord Dunlop]

My Lords, I begin by thanking speakers from all sides of the House for their helpful, constructive and supportive contributions to this debate and the noble Lord, Lord McAvoy, for his generous words. I echo what several noble Lords have said about Peter Robinson. It is always useful to hear views from across the spectrum and I shall try, in my closing remarks, to address as many of the points raised as I can.

The noble Lord, Lord Alderdice, asked why we had not moved more quickly. The Government were keen not to absolve the Northern Ireland parties of the responsibility that devolution brings, and the Secretary of State was clear throughout that legislation in this Parliament was a last resort. We were also very mindful of the need, were we to legislate in this Parliament, to get legislative consent from the Assembly. The noble Lord also mentioned the issues around legacy. It is very regrettable that consensus on all aspects could not be reached. The Government have worked hard to build consensus with the Northern Ireland parties over many weeks of intensive discussion, and the Government remain committed to continuing to work to build consensus on legacy issues. That is very much for the reasons about which the noble and right reverend Lord, Lord Eames, spoke so powerfully, with his focus on finding closure for victims. I was very much encouraged by his message of hope.

The noble Lord, Lord Alderdice, also mentioned a body to monitor paramilitary activity. The establishment of a monitoring body to assess the impact of paramilitary activity on local communities is a crucial part of the final agreement between the Northern Ireland parties. The new body will measure the impact of paramilitary activity on local communities, as well as monitoring the delivery of the strategy to be developed by the Executive to bring an end to all paramilitary activity in Northern Ireland.

Turning to what the noble Lord, Lord Browne of Belmont, asked on the review of the sunset date after the Assembly elections, the Government’s strong view is that it is essential that the sunset clause runs until 31 December 2016. An earlier end date would mean that the necessary structural changes to the Northern Ireland welfare system could not take place. In other words, there has to be sufficient time to undertake other reforms such as those provided for by the Welfare Reform and Work Bill. This was a point accepted in the agreement reached last week and confirmed by the legislative consent motion passed by the Assembly last Wednesday.

The noble Lord, Lord Glentoran, raised a number of issues about the Fresh Start agreement and I very much agree with what he is saying about the future in Northern Ireland, which is really about getting a strong economy in Northern Ireland. He talked about the finances of the Northern Ireland Executive and said that securing the implementation of welfare reform legislation is absolutely critical to putting those finances on a more secure footing. It is not a free lunch and included in the Fresh Start agreement is enhancing the fiscal responsibility of the Northern Ireland Executive through additional financial controls to limit the Executive’s potential to set unrealistic budgets in future. Key to that is a new, independent fiscal council for Northern Ireland.

The noble Lord, Lord Hay, talked about the cost of not implementing welfare reform, and he was right to highlight that failure to implement welfare reform is costing the Executive around £2 million a week. That is the difference between what the Treasury is prepared to fund up to parity with Great Britain and the cost of continuing to run the old, unreformed welfare system. The Northern Ireland Executive estimates that the cost to their budget next year will rise to more than £200 million and to more than £500 million by the end of this Parliament. That is clearly unaffordable, and these figures do not even take into account the cost of IT.

In terms of some of the points raised by the noble Lord, Lord McAvoy, I am very happy to write to him. We have taken this broad power because, when the 2012 welfare reform measures were first introduced, Northern Ireland’s Department for Social Development agreed certain administrative flexibilities with the Department for Work and Pensions. These included, for example, a slightly different sanctions regime and the ability for welfare payments to be made to claimants on a fortnightly rather than a monthly basis. Clearly, as I have said already, we have chosen a date that makes it possible to implement other 2015 reforms that are still in train.

I hope that answers most of the points. If I have not answered all the points then I am of course very happy to write to the noble Lord.

Bill read a second time.