Stormont House Agreement

Ivan Lewis Excerpts

Wednesday 7th January 2015 Commons Chamber

[Mr Ivan Lewis (Bury South) (Lab)]

I thank the Secretary of State for advance sight of her statement. The Opposition welcome many aspects of the agreement that she has outlined to the House. It is not perfect, but it is a genuine advance on the stalemate of the past two years. I congratulate the Secretary of State, the Under-Secretary of State and their counterparts in the Irish Government on their painstaking and, I am sure, at times painful facilitation of the talks. I also recognise the contribution of US Secretary of State Kerry’s special representative, Senator Gary Hart.

Throughout the political impasse of the past two years, we have repeatedly called for the Government to play a more active role. We hope that the right lessons have now been learned about the consequences of disengagement for political stability and momentum in Northern Ireland. I am sure the Secretary of State will agree that there is no room for complacency. As we have seen in the recent past, unresolved issues such as parades and flags have the potential to fuel public concern, disorder and, ultimately, political instability.

I want to pay tribute to Northern Ireland’s political leaders for stepping back from the abyss and restoring some level of public confidence in their capacity to move Northern Ireland forward. It should be acknowledged that they face unique challenges in managing the transition from a society scarred by conflict and sectarianism to a more normalised society. However, that acknowledgement does not mean exemption from difficult political choices about priorities, or an expectation of blank cheques from this or any future Westminster Government.

Turning to the agreement itself, we welcome the adoption of a viable budget for the next financial year. It is right that it includes some elements of welfare reform while excluding the pernicious bedroom tax, which an incoming Labour Government will scrap. However, we remain concerned by the Government’s rush to introduce legislation on corporation tax devolution, a decision that will have profound implications for Northern Ireland and the rest of the United Kingdom. We believe that there should be a proper consultation process, including an analysis of the financial impact of significant reductions in corporation tax on Northern Ireland’s block grant, before legislation is introduced in this House.

It is good news that a comprehensive system for dealing with the past has finally been agreed. It is to be hoped that, over time, victims and their loved ones will develop confidence in the integrity of the new architecture and get the truth and justice that they have been denied for too long. We also strongly support the Government’s decision to make new investment available to boost integrated education. That is one of the most powerful manifestations of what a shared future can mean for Northern Ireland.

I have a number of questions for the Secretary of State. What assessment have the Government made of the impact on the block grant if Northern Ireland reduced corporation tax to the levels of the Republic of Ireland? What criteria will be applied to determining whether penalties will be levied by the Treasury next year in connection with welfare reform? What is the time scale for the creation of the new system to deal with the past? What negotiating process will be put in place to deal with unresolved issues such as parades, flags, and other identity issues such as the Irish language? Finally, what process has been agreed to monitor the implementation of the agreement? I am sure the Secretary of State will agree that it is one thing to reach an agreement, but for the sake of credibility, it is incredibly important that that agreement is now implemented.

[Mrs Villiers]

I thank the hon. Gentleman for his expression of support for much of what is in the agreement, and for his kind comments about the work in which I and Minister Flanagan took part. As ever, I refute his allegation of a period of disengagement. At no stage have this Government been disengaged from Northern Ireland. We have actively worked throughout our time in office, not least in agreeing an economic pact that saw us working more closely with the devolved Executive in Northern Ireland than ever before, in addition to bringing the world’s media to Northern Ireland for the tremendously successful G8 conference.

I welcome the hon. Gentleman’s comments about progress on budget matters. Those on both Front Benches are united on the point that there will be no blank cheques, and the Government have put forward a significant and important financial package, reflecting Northern Ireland’s specific circumstances. I was disappointed to hear his comments on corporation tax devolution, because I think that change could have a significantly transformative effect on Northern Ireland’s economy. Northern Ireland is in a unique position in the United Kingdom, because it shares a land border with a jurisdiction that has a much lower rate of corporation tax. I urge the hon. Gentleman to urge the shadow Chancellor to allow Labour to support that change, which I believe is good for Northern Ireland.

The hon. Gentleman asked about the implications for the block grant. The Azores criteria mean that any future reduction in corporation tax in Northern Ireland needs to be funded from the block grant. Various estimates have been made of what that might look like, but at this stage it is impossible to be certain, not least because no final decision has been made on what the rate would be reduced to.

On the criteria for calculating welfare shortfall payments, the £114 million due in financial year 2015-16 is dependent on progress on implementing welfare reform. The quicker welfare reform is introduced and is up and running, the lower the shortfall payment will be. The time scale on the past is a key point, and the Government are keen to start working with the Northern Ireland Executive on the work needed for those institutions. They will certainly need Assembly legislation and in all likelihood they will also need Westminster legislation, and we are getting on with those matters.

The agreement sets out provision for a commission on flags to be established by June, and it is important that we press ahead with that. There is clearly more work to be done on that issue and on parades, and the agreement provides for further work by the Office of the Legislative Counsel of the Executive, bringing forth options that can then be consulted on for reform of the parading system. The process for monitoring will start with its first meeting between the Executive and the Government by the end of January. The final paragraphs of the main part of the agreement set out a system for monitoring implementation, and that will be taken seriously by the Government. It will, of course, involve the Irish Government, where appropriate and consistent with a three-stranded approach, and we look forward to getting down to work with the Executive on those matters.