Northern Ireland Budget (No. 2) Bill

Gavin Robinson Excerpts

2nd reading
Monday 10th July 2023 Commons Chamber

[Chris Heaton-Harris]

I thank the hon. Gentleman for his point, and we could consider introducing a needs-based factor into the Barnett formula for Northern Ireland—it would be a similar mechanism to that implemented in Wales—to put Northern Ireland’s public finances on a more sustainable footing. However, the absence of a functioning Executive has an impact on what can be done to address the systemic issues that Northern Ireland faces. Locally accountable leadership is urgently required to ensure that Northern Ireland has a stable and flourishing economy, and to advocate for reform of Northern Ireland’s public finances. To completely answer the hon. Gentleman’s point, negotiations between the Welsh Government and the Treasury on a fiscal framework and Barnett formula adjustments took over seven years. This is not an issue that could be solved overnight, even with the best will in the world.

[Gavin Robinson (Belfast East) (DUP)]

I am very grateful to the Secretary of State for that confirmation that he is at least willing to discuss considering public finances on the basis of need. Of course, the reason why the Holtham Commission process took so long was that it was the first example of the Government having to get their head around need—they had to understand it, and recognise that the public finances should respond to need. Now that the principle is clear, surely he does not believe that it would take as long this time around.

[Chris Heaton-Harris]

I very much hope that no discussion with a future Executive would take seven years to come to any conclusion. In the meantime, we have a responsibility to ensure that public services and the management of public funds can continue. That is why I have commissioned a range of information and advice from the Northern Ireland civil service on potential measures for raising more public revenue and otherwise improving the sustainability of public finances in Northern Ireland that an incoming Executive could consider. That is the UK Government’s first step in supporting the development of revenue-raising measures in Northern Ireland. It will allow us to better understand the challenges of taking this work forward, and support the Northern Ireland civil service in delivering it. The Government have for many years recognised the unique challenges that Northern Ireland faces. We have provided around £7 billion in extra funding to Northern Ireland since 2014, on top of the Barnett-based block grant.

I am grateful to officials in the Northern Ireland civil service for keeping public services running until an Executive are in place. The Government will continue to support the Northern Ireland civil service where we can, but it is important to note that responsibility for the difficult spending decisions flowing from this budget will ultimately continue to rest with the Northern Ireland Departments in the absence of an Executive. I do not want that to happen, and I encourage the people of Northern Ireland to urge their locally elected politicians to return to Stormont, so that decisions can be taken by those who were democratically elected to do that. As I say, the difficulties that Northern Ireland Departments face are a result of tough decisions not having been taken by elected representatives in Northern Ireland, not just this year, but over successive years. Funding alone will not solve the issues; that will require strong, responsible leadership, backed by a stable, devolved Government. We need the Executive back, so that they can progress much-needed and long-promised public service transformation.

Like others, I welcome the parties’ ongoing discussions with the head of the Northern Ireland civil service. There is a great deal of work going on behind the scenes about what a plan for government, and a budget for government, would look like, and how critical issues will be addressed when the Executive come back—issues such as budget sustainability and better, more efficient public services, which should be everyone’s priority. However, the head of the Northern Ireland civil service has written to me to say that things now need to become more political. In a way, I agree, but if that is to happen, all the parties must confront hard choices and ensure stability, rather than regular political crisis.

We must restore confidence in the institutions and show the people of Northern Ireland and the world what good devolved government looks like. I look forward to speaking with all the party leaders in the coming weeks, and receiving their proposals for the budget and a programme for government.

--- Later in debate ---

[Gavin Robinson (Belfast East) (DUP)]

It is a pleasure to follow the Chair of the Public Accounts Committee, the hon. Member for Hackney South and Shoreditch (Dame Meg Hillier) because, in fairness, she has added a new and useful level to the debate. Hers was a very worthwhile contribution, so I thank her for participating and hope that she shows a renewed and continued vigorous interest in the issues of Northern Ireland.

There have been a number of very useful contributions so far in this debate, if we set aside that from the honourable Healy-Rae from Foyle—the hon. Member for Foyle (Colum Eastwood). We enjoy the hon. Member oscillating from a year and a half ago, when he was spending his time cajoling, provoking, ridiculing and mocking my leader and my party at a time when we were raising serious issues, to today, when he is poking, prodding, encouraging and saying, “Just get back to work”, again ignoring serious issues and not recognising the sincerity with which we have sought to highlight and the aspiration to address the issues that are frustrating the proper operation of devolution.

We have heard from my right hon. Friend the Member for East Antrim (Sammy Wilson), who talked about the imbalance between what was attempted to address the deficiency in democratic accountability on issues agreed in Europe and the lack of provision and the danger associated with divergence on Bills brought forward through this place. This week and last, for example, the Postal Packets (Miscellaneous Amendments) Regulations 2023 has been but one issue that jars entirely with what the Prime Minister said when the Windsor Framework was published.

We can see clearly how that will treat parcels coming to and from Northern Ireland as foreign parcels, and we can see clearly how it up-ends the commitments given to the people of Northern Ireland during the Windsor framework process—lest we forget—when the majority of parties in Northern Ireland said that there were no problems with the withdrawal agreement and that it should be rigorously implemented on the people of Northern Ireland. When the Windsor framework was published, they said it was a wonderful solution, yet here we are even today, and we can see that the issues left unresolved will continue to plague and cause difficulty for the shared aspiration of restoring devolution. I say that at the outset, because it is important to consider again the context of why we are considering this Bill.

When we have debates such as this, Members will hear criticism, and I will not shy away from that. From my perspective, touching on the principle of this Bill and the reason why we are here today, the Northern Ireland Office has not done enough, the Government have not given enough and the people have had just about enough. When I say that they have not done enough, we should listen to the hon. Member for Gordon (Richard Thomson). He and I do not share the same political perspective on these things, but he highlights accurately that here we are debating a Bill that has not had any pre-legislative scrutiny and that has not been before the Northern Ireland Affairs Committee.

We are implementing and allocating resource to a budget that has not been section 75 screened, and it is having huge and undetermined consequences for the public sector in Northern Ireland and the voluntary sector in Northern Ireland. Even if Members are willing, and I am not, to forget about them, it is affecting the ability of our Government Departments to fulfil their statutory functions—to educate children, to care for the elderly, to heal the sick. It is not me saying that, but every permanent secretary who has sought to engage with the Northern Ireland Office and has highlighted how difficult this process would be.

When the Children’s Law Centre, in the most non-party political way possible, writes to me and every other Member of Parliament to highlight just how deficient this process has been, it is amazing to see in the explanatory notes that the Bill is being rushed through because it is urgent. The written ministerial statement was issued on 27 April, and yet there has been nothing in between, knowing that the allocation on 27 April was not sufficient, and knowing at the time that permanent secretaries were saying they could provide their statutory and core functions, never mind extras such as extended schools or support for the most vulnerable members of our society. Let us not forget that that was a choice that the Northern Ireland Office made.

The explanatory notes say that there was no pre-legislative scrutiny, no consultation, and no equalities screening because the Bill had to be rushed, but when will Committee stage be? We do not know. Such a rush, but the Committee has not been scheduled. We hear that we are getting to the stage when things are becoming political. We also hear that there will need to be another Northern Ireland Bill—a Bill that gives the Secretary of State the ability to make decisions on behalf of permanent secretaries.

For the last two months, since the written ministerial statement about the allocation, there has been nothing. There has been no consultation on or scrutiny of the Bill, because it has to be rushed, but we do not know when its remaining stages will be. We now hear that there is need for a third Bill—by the way, a Bill specifically to provide the powers that the Northern Ireland civil service asked for, but that the Secretary of State chose not to include, in the Northern Ireland Budget Bill that received Royal Assent on 8 February. The Northern Ireland civil service provided draft provisions to the Northern Ireland Office, which refused to advance them. Now we hear that there is need of a third Bill, but we all know that there are very few weeks of parliamentary time left before this Session concludes. There will be recess in the summer. There are a couple of sitting weeks in September, but there are precious few weeks left. The Government are playing at this, and the NIO has not given enough.

I remember the debates that we had back in January about the Northern Ireland Budget Bill, and I remember the Minister of State responding, “Northern Ireland gets £1.20 where my constituents get just £1.” I remember crying out in the wilderness back in January about the Northern Ireland Fiscal Council, and the difference between what we are allocated and what we need. The only difference now is that more people seem to engage with that argument. The Fiscal Council has revised downwards its figure of how much spending Northern Ireland needs to England’s £1, from £1.28 to £1.24. Year on year, financial cycle after financial cycle, there is a deficit in the resources that we get. There is a compounding negative impact on the ability to deliver public services in Northern Ireland.

New Decade, New Approach was mentioned. That, and some of the industrial relation issues that arose at the time, were about pay parity. Pay for public sector workers in Northern Ireland was not keeping up with that for their counterparts in England, Scotland and Wales. Parity was achieved in 2020, yet the rates in Northern Ireland are now growing ever faster apart from those in England, Scotland and Wales.

[Chris Heaton-Harris]

indicated dissent.

[Gavin Robinson]

The Secretary of State shakes his head, but he knows the figures. In the next financial year, public spending in Northern Ireland will increase by 3.6%; public spending in England will increase by 6%. The disparity between what we get and what we need, and between what we get and what other parts of the United Kingdom get, continues to grow. That compounds the difficulties.

Some £297 million is scheduled to be taken out of our allocation this year and next. We are supposed to be grateful for the fact that it will not be taken out this year, and that the cut will be spread over two years. There is a projected overspend this year of £500 million, and a deficit of £575 million from public pay awards. That is £1.4 billion before we even start. I do not say that to be boring or over-detailed. Do I even care whether the Government agree with those figures? Not really, but people who should share our aspiration for a positive return to devolution when the circumstances are right need to recognise that there is nothing positive about the consequences of this budget—nothing positive at all. I am not an Assembly Member, but I suspect precious few will wish to take responsibility for the austerity and cuts that this Government have provided. That is why I say that people have just about had enough. They are not unfamiliar in Northern Ireland, despite how frustrating it is, with political discord. They understand the challenges in devolved Government. It is not lost on people, when we have just celebrated 25 years of the Good Friday agreement, that, for 40% of those 25 years, devolution did not operate. In fact, the majority of the time that it did operate was when the DUP and Sinn Féin were leading it, but the people of Northern Ireland are not unfamiliar with the frustrating circumstances that we find ourselves in. However, they want to hear a bit of realism.

When the Chairman of the Northern Ireland Affairs Committee, the hon. Member for North Dorset (Simon Hoare), who is not with us today, was batting back and forth with me in January on need and the Northern Ireland Fiscal Council, he dismissed those points. In fairness to him, we corresponded thereafter—it is not often I praise him, by the way—and he took my initiative. He talked to his colleagues and got Committee agreement to hold an inquiry on these financial issues. The evidence sessions have been useful, highly illuminating and will be in our best interests. That is why I say people want to see realism. They want to see us working together.

Yes, we will disagree about different methods and different ways of doing things, but we should recognise that, when there is a core problem, we need to work on the core solution. When there is a deficiency in how we are funded in Northern Ireland, we need to work to address that. When we need more resource simply to stand still—not to provide luxuries, but to provide essential services that people need and rely upon in Northern Ireland—we will do that collectively if needs be, but the Government should not sit back and wait for some collective ask. They know the facts and they have ignored the facts for month after month.

I am delighted to hear the Secretary of State say that they will now engage in the discussion on need. That is a departure from what the Northern Ireland Office has been saying for months. It is not a departure for Government in policy terms, given what has gone through in Wales previously, and it should not all be one-size-fits-all. We need to ensure that we invest not only in the financial aspects of how we deliver for people in Northern Ireland, but in Northern Ireland itself.

Northern Ireland Budget (No. 2) Bill

Gavin Robinson Excerpts

Committee of the whole House
Monday 4th September 2023 Commons Chamber

[Gavin Robinson (Belfast East) (DUP)]

It is a pleasure, as always, to follow the hon. Member for Belfast South (Claire Hanna), my constituency neighbour, but the content of my speech will be slightly different from hers.

I will not delve into the Committee stage, amendments that were tabled but not brought forward, or amendments that were needlessly provocative and stepped far away from the principles that the party that tabled them purport to stand for, but I want to talk about the Northern Ireland Budget (No. 2) Bill, which is the second such budget Bill that has been before this House this year.

When we discussed the original Bill, it was just called the budget Bill, rather than No. 1 or No. 2. We were dealing with last year’s financial position and, at that stage, Members from my party introduced the discussion around need. We challenged the Government about their understanding of need, and we were patronised at that time. We were told, without any sense of irony, shame or knowledge of the facts, that in Northern Ireland we are over-funded and get £1.21 for every £1 that is spent in England.

But still we tried to bring the conversation back to assessed need and the similar process that Wales had to go through over five years with the Holtham Commission. However, there was no sense that the position that we were outlining, identified by the Northern Ireland Fiscal Council in September last year, was a position that recognised that while our Budget may grow by 3.6%, public spending in England was going to grow by 6%, or a recognition that by the end of this financial cycle households in Northern Ireland would each be £2,000 less well-off than their counterparts in the rest of the United Kingdom, and therefore there was a budgetary problem. It has taken from January of this year to now for that seed to start germinating.

When there is a recognition in public discourse that this is a punishment budget before us this evening—this has been described as a punishment budget, which has been ignored by those in power—and no decision is taken to change it meaningfully or beneficially for the people of Northern Ireland, it will hurt us economically. We cannot systemically assess Northern Ireland public finances and know that what Northern Ireland gets is less than what it needs and not recognise that that has a material impact on the delivery of public services. Yet that is exactly what we are discussing this evening. The Fiscal Council has now published and what it says is recognised. I remember the back and forth with the Chairman of the Northern Ireland Affairs Committee. I was grateful that he took on my request to carry out an inquiry on this issue. He has been on a journey and now recognises that when the Fiscal Council says what we need to deliver effective public services with £1.24, we are getting less than what we need. When that is done year on year, there is a compounding negative impact. It means that every year we are starting with less and that this budget simply has a recurring feature of making sure that public services in Northern Ireland are denied the money that they need to be operated effectively.

I know that repetition is not sinful in this place, but it is worth reiterating time and again that, until the Government embrace this discussion meaningfully and properly, Northern Ireland public services will not be able to flourish. Drastic decisions that are being taken and have been taken will continue to be taken.

[Simon Hoare]

What the hon. Gentleman is saying is undoubtedly true, but does he also accept—I think the Select Committee has been hearing this during our inquiry—that there is a real sense of frustration among many of the professional practitioners about the absence of the delivery of transformational change: delivering public services in a different way; or getting more bang for the buck, to put it more crudely. A functioning Executive in Stormont would lead to some big, bold and brave decisions. I understand that would be difficult for parties across the piece, but trying to deliver public services in the same old way in the absence of transformational change, given budgetary pressures across the public purse in respect of whichever party in the UK, is an opportunity that is missed and is to the detriment of people across the whole of Northern Ireland.

[Gavin Robinson]

The best that can be hoped for in this scenario is that a return to devolved Government means that locally elected representatives and Ministers in an Executive can make the choices based on the information put before them. The hon. Gentleman cannot—nor can I—dictate what those choices should be. The choices have been there for previous Executives, yet I may argue that the wrong decisions have been made. But what I am suggesting in the here and now is what we can control. Not only are we continuing to finance less than what we need, but we are continuing to break parity between the delivery of public services in Northern Ireland and England, Scotland and Wales.

The former Secretary of State, the right hon. Member for Skipton and Ripon (Julian Smith), who is in his place, will remember the pay award parity issue that abounded whenever he was embarking on the New Decade, New Approach discussions in 2019, culminating in a deal in 2020. The first nursing strike ever in any part of the United Kingdom was based on that pay parity issue alone. And here we are, just three years later, and parity has broken again. Here we are from the last financial year and we recognise that there is not only a £500 million projected overspend this year, but a £575 million public pay pressure. When we add on the overspend from last year, which was £297 million but now seems to be £254 million, the figure, whatever it is, takes us close to a deficit of £1.3 billion.

I agree with the Secretary of State when he said—I am sure with much thought—that Northern Ireland does not need the sticking plaster of a one-off financial package. Let me be very clear that not one person from my party, or anyone sensible from Northern Ireland, has suggested that what we need is a one-off, one-year sticking plaster to fix a problem that is of this Government’s making. We are asking for a pragmatic and mature reflection on how much it costs to deliver Northern Ireland’s public services, and to get on with recalibrating the Barnett formula to ensure that we can do so. That is what we need. That is not yet what we have. The choices will be there for a new Executive.

The second most drastic thing that I think the Government have introduced into the debate is the notional view that we just need to get on and raise revenue. You have heard it, Madam Deputy Speaker. The Minister mentioned it this evening: a £27 billion budget for the forthcoming year. Take household rates, the biggest household contribution to the public finances that individuals make outside of tax and national insurance, with £1.7 billion raised each year. Can we honestly imagine indicating in a cost of living crisis to our public, businesses and wider society that they should double their domestic and non-domestic contributions to household rates? Doubling them would allow us to get close to where we need to be. No problem. By 2025, we will have £2,000 less than every household in England, but add another £2,000 on, please, to stand still. Get real. Transformation? I have an idea: let us raise money by increasing tuition fees.

That brings me back to when I replied to the hon. Member for North Dorset about the choices that an Executive will have. We cannot determine those, but in the past whenever people were saying that there should be an increase in tuition fees it was for a beneficial outcome. Increase tuition fees and we can get rid of the maximum student numbers cap. Increase tuition fees and we will be able to fund more places so that our best and brightest will no longer have to leave Northern Ireland to be educated in England, Scotland and Wales, or anywhere else in the world. Those were positive benefits from an increase in tuition fees, yet it was never politically acceptable. Now what is on offer is just raising the cost to stand still, or to provide public services when we know that what we get is not sufficient to match the need.

Nobody is asking for a sticking plaster. Nobody can say what the choices shall be. I did not intend to speak for as long as I have, and I want to let other people contribute, but here we are again, with the second budget Bill of the year and the same challenges. It is progress at least that on 5 July the Deputy Prime Minister accepted for the first time, in response to a question from my right hon. Friend the Member for Lagan Valley (Sir Jeffrey M. Donaldson), our party leader, that finances in Northern Ireland need to be predicated on need. That was the first time that we had heard that. Having been dismissed and ignored in January, we had acceptance of it in July. Yet the challenge is there for the rest of the financial year.

The punishment budget that has been outlined and is being advanced this evening will continue to cripple the effective delivery of public services in Northern Ireland. I have heard nothing from the Northern Ireland Office, or from anyone else around Government, to suggest that they are in the space of turning that around within this financial year. We are halfway through it. We want to see political progress, but the idea that we get political progress only for an incoming Executive to falter because they cannot deliver for the people would be the biggest crime of all.

--- Later in debate ---

[Stephen Farry]

I am very grateful to the Minister of State for his comments. I largely agree with him, but I will point to a certain disagreement on some aspects. I fully recognise that there have been past financial packages and problems with reform not being fully realised, particularly around integrated education, which is a clear example. We have to do better in that respect. From where we are, I do not see any alternative to trying to do that once again and learning the lessons from what happened in the past. I recognise that we have seen additional funding packages from the UK Government—obviously, we had a major uplift in support to deal with covid and its side effects on the economy, and that support was very welcome—but the fact is, as other Members have said, that our expenditure per head is not based on our need, and that fundamental point has to be recognised.

[Gavin Robinson]

I think it is helpful to emphasise at this point that, although the Minister indicated that this budget is exactly what an Executive would have been allocated were they in place, last year it was £322 million less than what an Executive would have needed, this year it is £431 million less than what an Executive would have needed, and the projection for next year is £458 million less. So in saying what he said, has the Minister not confirmed the real problem at the heart of this?

[Stephen Farry]

Indeed. I think we are talking to two separate points in that regard. Yes, the block grant would have been based on the current policy approach from the Government towards the Barnett formula and the assessment of need in Northern Ireland, but what we on these Benches are all saying is that we need to reassess the whole basis of how that is reflected. That is a conversation to be had. I would also take the point a bit further by saying that, if we had had an Executive in place, or indeed if we get an Executive in place shortly, that would be the form by which we could make this case much better to address both the fiscal squeeze and the negotiations on a financial package for Northern Ireland.

To give a human flavour to the scale of the crisis facing our society, I will close with one example of an area of crisis in Northern Ireland: special educational needs. There is a real crisis happening in that regard: the funding available is not meeting the levels of need. As I think all Members appreciate, this is one of the most sensitive areas, and one where Government has a duty to invest in children and ensure that their rights are properly protected. As we meet this evening, that is simply not the case in Northern Ireland. There are multiple failures to provide for children; the academic year has now started, but scores of young people still have not been allocated suitable special educational needs places. That has a major toll on parents and families—mental health issues and financial and career pressures—and on the children themselves, particularly a lack of opportunity, health and safety issues, a risk of regression and a lack of social inclusion. I appeal to Members, from whatever perspective we look at this—the Government in terms of setting the financial parameters, and also those who are still holding out for an Executive—that we need to get back to addressing those types of issues. That is what the coalface is like, and that is what we should be prioritising.