Northern Ireland (Welfare Reform) Bill

Ben Wallace Excerpts

Monday 23rd November 2015 Commons Chamber

[The Parliamentary Under-Secretary of State for Northern Ireland (Mr Ben Wallace)]

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

Welfare is a devolved issue in Northern Ireland. Over time, the agreed principle has been that welfare policy, spending and administration in Northern Ireland maintain broad parity with that in place in the rest of Great Britain. The parity principle has served Northern Ireland well. It means that benefit claimants have been able to avail themselves of the same rates of benefits as those in the rest of the United Kingdom. The UK Government have been clear that they will not fund a more generous welfare system in Northern Ireland than that in place elsewhere in the United Kingdom.

Over the past three years, the Northern Ireland Assembly has been unable to implement welfare reform legislation that mirrors that of the Welfare Reform Act 2012, which is in place in the rest of the UK. The Assembly’s Welfare Reform Bill was introduced in October 2012, but was stalled at Committee stage in February the following year. Following a petition of concern, the Bill fell at its final stage in May this year.

The Secretary of State has outlined the implications of this failure to maintain parity, and the various steps that have been taken to bring us to where we are today, with Westminster having to legislate for welfare reform in Northern Ireland. As welfare is transferred, clause 1 provides the Government with a power to legislate for welfare in Northern Ireland via an Order in Council.

[Ian Paisley (North Antrim) (DUP)]

Will the Minister expand on the petition of concern? Is it an abuse of the parliamentary process, and is it anti-democratic?

[Mr Wallace]

Clearly, the use of petitions of concern is a matter for the Northern Ireland parties and for the Northern Ireland Assembly. All I ask is that parties in Northern Ireland recognise that the petition of concern is related to community concerns, and should not be used for things such as caravan legislation, or other such matters.

Taking this power enables the Government to implement Northern Ireland-specific flexibilities in the welfare system. When the 2012 welfare reform measures were first introduced, Northern Ireland’s Department for Social Development negotiated certain administrative flexibilities with the Department for Work and Pensions. They 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.

In addition, as part of commitments made under last year’s Stormont House agreement, the Northern Ireland parties agreed a range of so-called top-up measures, which were designed to compensate claimants who were losing out as a result of the welfare reforms. The Assembly’s Welfare Reform Bill—the one that fell in May—was amended to reflect the various administrative flexibilities and top-up measures.

In providing a broad power, the Bill allows the Government to implement these Northern Ireland-specific flexibilities and top-ups. That reinforces the fact that the Government’s intent is not to impose Great Britain’s welfare system on to 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 that clear. The order is based largely on the Assembly’s Welfare Reform Bill that fell at its final stage in May. It therefore includes the reforms made in Great Britain by the Welfare Reform Act 2012; the various flexibilities agreed between the Northern Ireland Department for Social Development and the Department for Work and Pensions; the amendments agreed during the passage of the Assembly Welfare Reform Bill; and provisions that allow for Northern Ireland Executive-funded top-ups.

The second reason for opting for a broad power in this Bill is that it enables the Government to implement other potential welfare reforms, such as those contained in the Welfare Reform and Work Bill currently being considered by the Lords.

The Northern Ireland Executive have just endured almost four years of political instability owing to their inability to implement the last major set of welfare reforms. It is important that the fresh start envisaged by the Northern Ireland parties is given time and space to grow and strengthen. If the Assembly considers the 2015 welfare reforms too soon, it could jeopardise this new-found consensus in Northern Ireland. It is therefore necessary for the Government to legislate for implementation of these measures.

[Mark Field (Cities of London and Westminster) (Con)]

The Minister is being very pragmatic in explaining the history behind this and why the Government are behaving as they are. Does he believe that it is desirable in the medium term that the welfare arrangements for Northern Ireland should mirror those of the rest of the United Kingdom, or does he think that this Bill will hold sway in the long term?

[Mr Wallace]

It is of course desirable that the welfare package and policy that this Government have come up with over the past four or five years is implemented across the United Kingdom. It is a good and well-needed reform. We also accept that, within the parameters of the devolved settlement, some devolved institutions have the ability to top up or be flexible in order to be able to deliver. In the long term, it will be interesting to see which delivers the best results for the people of those countries and whether our welfare reforms without flexibilities produce a better outcome than those that are adopted elsewhere.

[Ian Paisley]

Will the Minister state very clearly that there has been no change to parity? These are flexibilities that Northern Ireland has achieved. There are about a dozen very positive flexibilities and about 105,000 hard-working, low-paid families in Northern Ireland who will benefit as a result of the huge effort that has been put into resolving this issue.

[Mr Wallace]

It is absolutely the case that those flexibilities may turn out to suit the people of Northern Ireland, but it is also the case that the flexibilities and top-ups will be funded by Northern Ireland from the block grant. The UK Government will not fund on top of the existing UK roll-out, as has been clearly set out by my right hon. Friend the Secretary of State. It is important to get the message across that the funding to push forward with those flexibilities is coming out of the Northern Ireland block grant.

[Ian Paisley]

Will the Minister clarify another point? When the Minister for Social Development introduced this in the Assembly at the end of last week, he put it on the record that the Executive will be able to reclaim some of the financial penalties that the Treasury has already taken from the block grant. Is that the case?

[Mr Wallace]

The hon. Gentleman is right. Certainly, in the negotiations, some of the penalties due for not implementing the welfare legislation will be returned to Northern Ireland. I am happy to write to him setting out the envisaged amount and the exact timing of when it would start to be rebated.

It is important to stress three important considerations at this point. First, the 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 the Assembly can legislate for it—and effectively reserved, meaning the Government can legislate for it as well. That situation may be unusual, but it is not without precedent, certainly when it comes to Northern Ireland. For example, there is similar concurrent legislative competence over regulations governing the flying of flags in Northern Ireland.

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. Consent was also granted to the Order in Council that will follow this Bill, and the welfare clauses of the Welfare Reform and Work Bill as initially introduced at Westminster. Thirdly, I can assure the House that the UK Government have no intention or desire to legislate on an ongoing basis for welfare in Northern Ireland. Welfare is properly devolved to Northern Ireland and will remain so. That is why clause 3 time-limits the power so that an order cannot be made after 31 December 2016.

As already noted, an Order in Council will follow this Bill. The order will make provision for welfare reform in Northern Ireland equivalent to the Welfare Reform Act 2012, and as I have pointed out, will provide for the various Northern Ireland-specific flexibilities and top-ups. First, legislating in this way, by an Order in Council, is the normal convention for secondary legislation with a devolution aspect. Secondly, as my right hon. Friend the Secretary of State has commented, it is essential that welfare reform is implemented in Northern Ireland as soon as possible. Given that speed is crucial, the only way to have the necessary legislation in place in the desired timescale is to delegate the detail of the welfare provisions to secondary legislation. Members should, however, be comforted by the realisation that the content of the Order in Council largely mirrors that of the 2012 Act, debated at length and in great detail in this House. There will be an opportunity to debate the order next week. I trust Members will reserve any detailed questions regarding welfare reform for that debate.

[Lady Hermon (North Down) (Ind)]

Given the complexity of an Order in Council in any circumstances and of the Bill that is being taken through the House at breakneck speed this evening, will the Minister please express some element of regret that neither the Northern Ireland Affairs Committee nor the Work and Pensions Committee had an opportunity to scrutinise them and report to the Northern Ireland Office before the Bill came to the House?

[Mr Wallace]

My right hon. Friend the Secretary of State made it clear that nearly all the provisions in the order have been thoroughly debated in the Northern Ireland Assembly over a long period, and this House has given considerable scrutiny to the 2012 welfare reforms and is doing so for ongoing reforms in the 2015 Bill. I am happy to arrange for the hon. Lady, should she so wish, to meet officials from the Northern Ireland Office and the DWP to discuss in detail any concern she has about the order between now and the debate next week, if that satisfies her.

[Mark Durkan (Foyle) (SDLP)]

The Minister touched on the Welfare Reform and Work Bill. It is not really covered in the Order in Council. Will it be the subject of a different Order in Council subsequently under this legislation, or do the Government intend to amend the Bill to extend it to Northern Ireland?

[Mr Wallace]

The answer is that, yes, it will be subject to an order different from this one, which is due next week, as far as I understand.

In conclusion, I emphasise the points made by the Secretary of State. This is a good Bill for Northern Ireland, a Bill which will help resolve the long-running, politically divisive stalemate over welfare reform. The Bill is a crucial element of establishing and building on the “Fresh Start” announced last week. The Bill and the subsequent Order in Council do not guarantee political stability in Northern Ireland, but without them political stability and progress are, frankly, impossible. Our approach may appear unusual or unconventional, but it does have the cross-community support of the vast number of Northern Ireland’s elected representatives. This Bill offers the only realistic prospect of resolving Northern Ireland’s welfare reform impasse, and I commend it to the House.

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[Ms Ritchie]

I thank my hon. Friend. I well recall that because I was a Member of the Northern Ireland Assembly at the time, and I was party to that proposal. I clearly remember that we were trying to achieve consensus on the best way to ensure that the best mitigation measures were put in place. That proposal was refused by the DUP and Sinn Féin—the cosy partners in government who deliver only for themselves and not for the wider public.

I speak as a former Minister for Social Development who had direct responsibility for benefits, and I well remember introducing a household fuel payment Bill, which was separate from measures that existed in Britain. That Bill sought to address fuel poverty and ensure that people who felt it would be difficult to pay for both eating and heating—we agreed with them—did not have to make that choice. The SDLP has always stood by the people and by the principle of consensus, and it is a matter of deep regret that others did not do so. I regret that the Bill is not being dealt with in the Northern Ireland Assembly, and that the power of devolution on these matters has been removed from our colleagues in the Assembly on a cross-community basis.

[Mr Wallace]

We are not taking away the power; we are taking the power in parallel. The power remains in the Northern Ireland Assembly, and should Ministers there wish to do so at any time in the future, they could bring forward welfare legislation. We are not removing the power, we are sharing it in a parallel process.

--- Later in debate ---

[Mr Wallace]

With the leave of the House, Madam Deputy Speaker, I will respond to the debate. It has certainly been a powerful debate with many powerful contributions. I totalled up the amount of time spent on Members’ speeches, and the average length was 23 minutes. There have been many Second Reading debates in which Members have had only three or four minutes to speak, whether on an important subject such as this or about other matters. That shows that, despite the concerns about the legislative timetable, Members from Northern Ireland have been able to get their points across in the most powerful ways. Of course, we should not be surprised about that. I have never felt that oratory is dead in Northern Ireland. One cannot be trained in oratory; one is born with it. It is a gift that falls on all the Northern Ireland politicians I have met, or nearly all, from whichever side of the divide or the debate they come. Many Members from elsewhere in the United Kingdom have enjoyed their contributions today.

It is important to answer many of the points raised during the debate. I start, of course, with the shadow Secretary of State, the hon. Member for Gedling (Vernon Coaker). I thank him for his support throughout this whole process. He has shown real leadership throughout, as before the election did his predecessor, the hon. Member for Bury South (Mr Lewis). I know that it was not always easy for Labour Members to talk about the welfare reforms that we were proposing, but nevertheless they showed real leadership. One of the reasons we are here today is that Labour has supported the Government throughout this process.

The hon. Gentleman asked me to spell out the timetable for the order. The order envisaged in the Welfare Act 2012 will be introduced imminently once this Bill is passed, as I hope it will be. The Order in Council covering the Welfare Reform and Work Bill would be introduced if and when that Bill is successfully enacted. Obviously, we could not do anything before then.

The hon. Gentleman asked about the Evason group. We hope that all its recommendations would be subject to the Assembly’s approval and that it would be in the power of Ministers in the Executive to take them forward should they choose to do so.

The hon. Gentleman asked about the December 2016 timetable. That was the timetable that all parties envisaged would allow us to put in place the welfare reforms that were required and to take account of any changes between then and now. It is important that there is time for those to bed in when enacted.

Finally, on the hon. Gentleman’s concerns about economic prosperity for Northern Ireland, the economic pact is alive and well; it has not been rescinded or changed. There is still the potential for a city deal, as the hon. Member for Foyle (Mark Durkan) said. That is in the gift of the Northern Ireland Assembly.

[Vernon Coaker]

I asked one other question that is quite important—namely, which of the clauses in the Welfare Reform and Work Bill will relate to the orders that are to come after the passing of this enabling legislation?

[Mr Wallace]

I was getting on to that, and indeed I have the answer. The Welfare Reform and Work Bill is about more than just welfare. For example, it has clauses on full employment reporting obligations and apprenticeship reporting obligations that would not be considered to be welfare measures, while on the other hand it has a benefit cap that would be so considered. If he looks at the Bill, the hon. Gentleman will see that some parts directly impact on welfare, as welfare measures, while others, such as the reporting mechanisms, do not. I will be happy to write to him in detail subsequently.

The hon. Member for Belfast South (Dr McDonnell) made a strong contribution. I always feel and understand his heartfelt compassion for his constituents who are on benefits and welfare. I pay tribute to him for his leadership of the SDLP and the good grace with which he has taken the recent change of leadership. I look forward to continuing to help and support him in trying to make sure that his constituents get into work and off benefits. We are really determined to make sure that the economic pact delivers for Northern Ireland, alongside the Northern Ireland Assembly.

The hon. Member for South Antrim (Danny Kinahan) made known his view that the UUP was locked out of the process and the concerns it raised were not addressed. Every single one of the UUP’s concerns, including a sustainable budget, legacy issues, paramilitary monitoring and organised crime, is addressed in this deal. They were addressed previously in the Stormont House deal and they are addressed in the new deal that we have before us tonight. The deal also comes with a significant amount of money: £185 million of new money will be made available to tackle paramilitarism and organised crime in Northern Ireland.

I add my tribute to that given by the right hon. Member for Lagan Valley (Mr Donaldson) to his party leader. On devolution, the departing First Minister has navigated a very difficult course. I was in the Scottish Parliament in the late 1990s, so I know that devolution is not straightforward, and devolution in a multi-party system is even harder. It is a real tribute to him that he has managed to bring Northern Ireland to this point and secured a new start with this deal. I hope that whoever follows him—perhaps the right hon. Gentleman’s powerful speech was a leadership bid—will continue in the same vein. As the shadow Secretary of State has said, this is about leadership. It is also about taking risks with one’s own electorate, not just those on the opposite side.

I say to the hon. Member for South Down (Ms Ritchie) that it was not our wish, either, that the Bill be taken through in this way. We do not want Westminster to have to pull back some of the powers to pass welfare legislation. If we were in a different place at a different time, the Stormont Assembly would have agreed it, but unfortunately Northern Ireland needs consensus and the SDLP is just one of the parties involved. Although I admire its determination for consistency on welfare reform, the fact of the matter is that we could not let the situation continue.

We asked the Assembly to pass a legislative consent motion, and it is important that I put on the record its wording:

“That this Assembly consents to the Northern Ireland (Welfare Reform) Bill 2015 being taken forward by the Westminster Parliament; approves the welfare clauses of the Welfare Reform and Work Bill as initially introduced at Westminster; the draft Welfare Reform (Northern Ireland) Order 2015; and the Executive’s proposals to enhance payments flowing from the agreement announced on 17 November 2015.”

Who are we to override that legislative consent motion? We believe in devolution, and a legislative consent motion from the devolved Parliament is asking this House to resolve the lack of consensus on welfare, to deliver for the people of Northern Ireland.

I say to the hon. Member for Belfast South that the biggest barrier to lifting people out of poverty in Northern Ireland is a dysfunctional Northern Ireland Assembly. Devolution, when it works, will deliver a better deal for the people of Northern Ireland, and it is important that we get over the current barrier by passing time-limited measures in this House, so that we can move forward together.

[Tom Elliott]

I appreciate the Minister’s helpful summary, but does he accept the assertion made by the hon. Member for North Antrim (Ian Paisley) that the deal is being approved by this House only because the Northern Ireland Assembly is dysfunctional and unworkable?

[Mr Wallace]

I do not think that the Northern Ireland Assembly is dysfunctional. It deals with people’s problems and issues every day. The Ministers I have met since my appointment make daily decisions that can result in improvements. On welfare, however, after four years of the tortuous freezing of government, something had to be done. If the Northern Ireland Assembly grasps the deal that the parties have achieved, the future will be all to play for. The ability to deliver and to improve the lives of people in Fermanagh and South Tyrone is better than the situation for many of my constituents. A lot of Members who are not from Northern Ireland will be slightly envious of the flexibility, funding and generous package on offer to the people of Northern Ireland. We do that with good will, because we want Northern Ireland to move away from its troubles and give the best chances to its people.

[Ms Ritchie]

Perhaps the Minister could take a little liberty and spell out some of the mitigation measures relating to in-work credits that the Chancellor might outline on Wednesday as part of the comprehensive spending review.

[Mr Wallace]

As much as I might like to say that the Chancellor rings me up to consult me on such major issues from time to time, I, like the hon. Lady, will have to wait and see.

I thank the hon. Member for Strangford (Jim Shannon) for his kind comments about me and the Secretary of State. I want to place on the record that without the Secretary of State’s determination and patience this deal may never have happened. Patience is a quality that many politicians do not possess, but she certainly does. [Interruption.] I am always for a good career move, but it is true.

It is tempting to follow the hon. Member for North Antrim down the path of his speech about Unionism and the sovereign Parliament, but I shall resist doing so. Suffice it to say that I will help him to lobby the Mayor of London for more buses from Wrightbus in his constituency, and I will do everything I can to help him and Ministers in the Executive to facilitate jobs to mitigate the losses at Michelin. Ministers from the British Government are all here to help job prospects in Northern Ireland, and I will continue to do so.

I say to the hon. Member for Foyle that we had to move forward on the issue of tax credits and welfare reform in Northern Ireland. As I said earlier, the fact is that there was no consensus, and in the end it was important to resolve this issue. Northern Ireland could not continue to lose the money every day and every week because it could not implement the welfare changes that people deserve.

[Lady Hermon]

The Minister has talked about the issues that have attracted consensus and those that have not. He will know that the Stormont House agreement did reach consensus about dealing with the legacy of the past. So much so in fact, that in late October the Northern Ireland Affairs Committee was circulated with draft clauses on dealing with the past. What on earth has happened to them? Have they been scuppered by the deal on welfare reform?

[Mr Wallace]

The agreement refers to continuing to try to address the legacy. I wish that was covered in the Bill and that we were dealing with it now—I and the team have spent a lot of time working on that draft legislation—but the issue has not gone away. We need to deal with it, and we will continue to consider the options. I ask the hon. Lady to recognise that the Northern Ireland Assembly still has the ability to get on and deal with the legacy should it so wish. I urge it to start that process, because we cannot just move on in relation to welfare and leave the legacy issue behind. I agree with her, and I will be pressing the parties to take forward that issue.

[Mark Durkan]

Is the Minister now suggesting that the Assembly, having passed legislation on welfare reform to Westminster, should act under its own steam to legislate in relation to the past?

--- Later in debate ---

[Mr Wallace]

I am merely stating the reality: the Assembly has the power not only to pass welfare reform, but to deal with the legacy. A lot of what this is about is the lack of consensus in the Assembly. This issue is not about where power resides, but where purpose and determination reside in some of the parties. We hope, as does nearly everyone in Northern Ireland, that the legacy issue is dealt with. We will give support throughout the process for that to be done, and we urge the parties to do it.

Lastly, I hear what the hon. Member for Fermanagh and South Tyrone (Tom Elliott) says on the UUP’s concerns about the paramilitaries and the past. I, too, share such concerns. That is why we have got £185 million more to invest in pursuing and monitoring paramilitaries or ex-paramilitaries, as they may or may not be. It is really important to continue to keep a lid on the security situation and persuade people away from the path of violence to make sure that the only things about which we disagree in future are things such as welfare reform and the main social policy issues. I do not want to have to deal with paramilitaries in my back garden any more than he does. That is why we should all welcome the fact that the fresh start will bring £185 million to the table to continue to support the police—the PSNI—and the security services in monitoring paramilitary activity.

We should remember what the Bill is not about. It is not intended to diminish Northern Ireland’s devolution settlement. It is not a power grab by the UK Government. As I have said, we would much rather not have had to intervene at all, but the Bill is necessary finally to resolve the welfare reform impasse. That is what the Bill is about. It is intended to secure a fresh start, to provide political stability and to secure a basis for the Executive’s budget. I urge the House to support it.

Question put and agreed to.

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