I warmly welcome the restoration of the Executive and devolved government in Northern Ireland, in the best interests of the people of Northern Ireland. I join others in commending my right hon. Friend and his team and, indeed, the work of the Tánaiste, Simon Coveney. We know just how challenging this has been, but it is a very positive development to see all five parties now within the Executive.

May I touch on the issue of sustainability? Now that the Executive have been re-established, it is important that they remain there—that they continue to serve the people of Northern Ireland and that we have that local decision making. Will my right hon. Friend comment on the steps that are being taken and will be taken to ensure that the devolved Government in Northern Ireland remain, and remain serving its people?

I know that my right hon. Friend will be taking these steps very reluctantly, as I remember doing when I was in his post. He has highlighted the deals and the investment in various parts of Northern Ireland. I am conscious of investment in the north-west and promoting economic activity and opportunity in that part of Northern Ireland. Can he comment on the plans for a graduate medical school at the Ulster University Magee campus in Derry/Londonderry, which could promote a sense of skill and opportunity and secure the positive outcome that we would like to see for the north-west?

Thank you, Mr Speaker. I congratulate my right hon. Friend on his appointment. It is a privilege to serve in office and I wish him all success with his role. He highlighted in his written statement yesterday the need to intensify negotiations with the parties. That is the way to avoid legislation being needed. Perhaps he could set out what form he expects that to take.

Will my hon. Friend give way?

I commend my hon. Friend for his work and that of his Committee. Does he acknowledge that one of the challenges is that no recommendations were agreed by the outgoing Executive? That obviously makes the job of the Secretary of State in determining the right way forward on the hugely sensitive issue of the recommendations that the Hart inquiry sought to bring forward extremely difficult, and that is why she has to think carefully about how best—cross-community, and with the parties—to assess the right way forward.

It is good to be back, and I thank colleagues on both sides of the House for their kind, generous and supportive comments over the past few weeks. What is not so welcome, however, is the continuing lack of devolved government in Northern Ireland, which it desperately needs. I commend the Secretary of State for all her work and for her efforts in seeking to bring the parties together. I also commend the Irish Government for their work.

I commend what the Secretary of State said about the Government’s commitment the Belfast agreement. That is our cornerstone; it is the bedrock of what we do. I also commend what she said about the troubles and the legacy of the past, and about making progress on the consultation. I hope that she will agree, however, that we need to remain firmly focused on restoring devolved government. Rather than talking up direct rule, we should continue to focus on talking out the remaining issues that lie between the two parties, and I hope that she will agree that we need to retain that focus in all we do if we are to restore devolved government and give Northern Ireland the bright, positive future that I know its people want to see.

I am grateful to the hon. Gentleman for highlighting the sectoral work relating to 58 areas of activity, which deals with how trade is currently conducted with the EU and what the alternatives might be. I can say that Northern Ireland has contributed to the cross-Government work at an official level, and the hon. Gentleman will be well aware of the commitments that DExEU has made in relation to the publication of that ongoing work. [Official Report, 15 November 2017, Vol. 631, c. 346.]

Letter of correction from James Brokenshire.

An error has been identified in the response I gave to the hon. Member for Ealing North (Stephen Pound).

The correct response should have been:

I am grateful to the hon. Gentleman for highlighting the sectoral work relating to 58 areas of activity, which deals with how trade is currently conducted with the EU and what the alternatives might be. The NIO contributes to a wide range of analysis on the impact of EU Exit, although the specific sectoral reports were produced by other Government Departments, co-ordinated by the Department for Exiting the EU.

Our clear intention is to avoid any physical infrastructure on the land border, and we welcome the European Commission’s commitment to that as an important step forward. The success of the land border comes from the fact that it is seamless and invisible, and we are resolute in ensuring that that remains the case.

We are resolutely committed to upholding all parts of the Belfast/Good Friday agreement, and to finding a solution that works for the people of Northern Ireland and Ireland. We have had continued engagement with the Commission and have, in our judgment, made good progress in that regard. Various principles have been agreed that may well need to be incorporated in the final agreement.

Obviously we respect the European Union’s desire to protect the legal order of the single market and the customs union, but that cannot come about at the expense of the constitutional and economic integrity of the United Kingdom. As we have said, we recognise the need for solutions that are specific to the unique circumstances of Northern Ireland, and we all have a responsibility to be thoughtful and creative, but that cannot amount to the appearance of a new border within the United Kingdom.

I am grateful to the hon. Gentleman for highlighting the sectoral work relating to 58 areas of activity, which deals with how trade is currently conducted with the EU and what the alternatives might be. I can say that Northern Ireland has contributed to the cross-Government work at an official level, and the hon. Gentleman will be well aware of the commitments that DExEU has made in relation to the publication of that ongoing work.

We firmly want to see progress on the second phase of the talks. I gave that message to Michel Barnier when I was in Brussels last week, and I also said that we believed significant progress had been made in relation to the first phase. We continue to focus on not only demonstrating our commitments in respect of those first three items, but getting on with the second phase, which is absolutely about the enduring relationship, and part of that is very much about solving the issues relating to Northern Ireland and Ireland, which we remain firmly committed to do.

I am grateful to the right hon. Gentleman for his comments. The solutions that we are determined to find will create no barriers, north-south or east-west, in relation to the trading and constitutional issues that he rightly highlights: that remains our firm intent. I believe that some of the commitments that the Commission has already made underline our position, but clearly we need to secure firm agreement in that regard.

The right hon. Gentleman firmly sets out the constitutional framework for Northern Ireland: the Belfast/Good Friday agreement, the principle of consent, and, very firmly, the three-stranded approach. To be clear, it is ultimately for the UK Government to provide certainty over the delivery of public services and those strand 1 issues in relation to Northern Ireland.

I totally agree with my hon. Friend about the strength of co-operation between the Police Service of Northern Ireland and the Garda Siochana, and at all levels, in relation to fighting the threat from terrorism and organised crime. We must remain resolute against this severe continuing threat, and we are strengthened by that co-operation, which needs to deepen and flourish further in the years ahead.

On the last point, we are firmly working on the basis that a hard border will not happen, and support for the common travel area and the principles that have been worked through jointly as part of negotiations underpin that. I would point to positive joint work between revenue and customs agencies in Northern Ireland and the Republic to confront organised crime and smuggling, and the way in which work with the National Crime Agency is being strengthened even further.

It is right that we focus on getting that deal. We support the common travel area—it is equally supported by the Irish Government—and principles have already been agreed as part of the progress on the first phase of the negotiations. That is where our focus rightly remains, and I believe that doing that remains firmly achievable—it is where all our attention lies.

The Government have a clear manifesto commitment to work towards a comprehensive and ambitious set of city deals across Northern Ireland to boost investment and help to unlock Northern Ireland’s full potential. My right hon. Friend the Secretary of State for Communities and Local Government and I have already had some early discussions with partners in the Belfast city region.

I can. The fact is that Northern Ireland has had no city deals, whereas England, Scotland and Wales have made 33 deals worth up to £4.9 billion. This is about the change that city deals bring and the other finance that city deals are able to unlock. That is why we strongly believe there is a firm place for city deals in Northern Ireland, and we are committed to advancing them.

Absolutely. We want the benefit of city deals to be felt across Northern Ireland. Although, yes, the Belfast city region has been advancing its own proposals, it is right that we look across Northern Ireland—to the north-west and to all parts of Northern Ireland—to see that the benefit and the transformative effect of city deals is firmly felt.

As the hon. Gentleman knows, I had discussions with hon. and right hon. Members, as well as with Belfast City Council, during the initial phase. We are looking carefully at how that work can move forward practically through officials and by other means. I am determined to see city deals taking effect, with their benefit being felt. This engagement will continue to ensure that that happens.

Maintaining our strong, historic ties with Ireland is an important priority, including the rights of Irish citizens in the UK as provided for in domestic legislation, including the Ireland Act 1949. These reciprocal arrangements reflect the long-standing social and economic ties between the UK and Ireland.

All I can say to the hon. Gentleman in respect of the constitutional arrangements is that yes, of course we uphold the Belfast Good Friday agreement, and we are determined that that will be reflected in the final deal. I cannot offer him any greater insight in relation to the other matter he has brought to the House.

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

Before I explain the details of the Bill, let me make some brief comments about events that took place yesterday. People who are intent on killing and harming others left a small but lethal bomb in Omagh before the Remembrance Sunday commemorations. Their actions stand in stark contrast to those of the brave men and women whom the community were gathering to honour—the men and women from all backgrounds who made the ultimate sacrifice to allow us all to live in a democracy.

I pay tribute to the work of the Police Service of Northern Ireland and others who dealt with that incident. I think that it underlines the continuing level of threat that we face, but, equally, what a repugnant and appalling act this was, taking place on Remembrance Sunday when people were gathering to pay their respects in the traditional way. I am sure that all Members on both sides of the House will condemn it utterly. If anyone has any information about the incident, I strongly urge them to do what they can, and bring it to the attention of the PSNI so that it can be pursued with all rigour.

I am grateful to the right hon. Gentleman for making that point, and for drawing attention to the incident that took place in Enniskillen 30 years ago, when 12 people lost their lives in an appalling bombing. I was in Enniskillen yesterday, as I had been on Wednesday, to remember and to mark the 30th anniversary of that appalling incident. I know full well the pain, the hurt and the suffering that many people still feel. Yes, many look for justice still to this day, and it is a matter of great regret that no one has yet been brought to justice for that appalling incident. I also note the equally strong feelings among many for reconciliation and the need for us to continue to work to bring communities together.

The right hon. Gentleman highlights the issues around the Stormont House legacy institutions. I want to progress that through to a public consultation, as it is the most effective way in which we can seek real focus on how to move forward and see those legacy institutions come into effect. I am not able today to confirm the timing of the publication of that consultation, but I want to get on with it. I know that the victim groups want that, and I take the point that the right hon. Gentleman has made very clearly and firmly.

Turning to the Bill, as I set out for the House a fortnight ago, it is now nine months since there has been a properly functioning Executive and Assembly. Despite the tireless efforts over the past 11 weeks—the most recent phase of the talks—the parties have not yet reached an agreement that would enable a sustainable Executive to be formed. In bringing the parties together for this most recent phase of the political talks, I have sought to help both the Democratic Unionist party and Sinn Féin to bridge the gap on a small number of outstanding matters, including language and culture, as well as on issues in relation to the continuing sustainability of the Executive. In doing so, I have worked closely with the Irish Government in accordance with the well-established three-stranded approach. I remain prepared to bring forth legislation that would allow for an Executive to be formed should the parties reach an agreement.

My strong preference would be for a restored Executive in Northern Ireland to take forward its own budget, so I am introducing this measure today with the utmost reluctance and only because there is no other choice available. Let me be clear: the passage of legislation to set a budget should not be a barrier to negotiations continuing. However, the ongoing lack of agreement has had tangible consequences for people and public services in Northern Ireland, for, 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 want to pay particular tribute to all those who have been engaged in the civil service seeking to manage the current events. The Northern Ireland civil service has demonstrated the utmost professionalism in protecting and preserving public services throughout these difficult times, and I wish to put on record my recognition of the work it has been doing.

The hon. Gentleman makes an important point about the accountability gap we have at present. At this time, the Northern Ireland civil service is effectively having to act based on its assessment of the political priorities of the outgoing Executive. There is no direct accountability. I will come on to certain steps I intend to take to seek to surface some of the issues, such as how any reports from the Northern Ireland Audit Office could be brought to the attention of this House. Ultimately, what we want is an Executive in place able to provide that accountability, and we do not want a move to any other alternatives because of all the issues that will bring about. There is an issue here, therefore, as the hon. Gentleman rightly points out.

As the hon. Gentleman will know, that is not a step that I intend to take while there is an opportunity for an Executive to be formed. Discussions have been ongoing—as they were even last week—between his party and Sinn Féin to try to find a resolution to the outstanding issues between the parties that can form such an Executive. I think it is right that we continue to pursue that, but he is right to say that this situation is not sustainable into the long term. It is absolutely in the best interests of Northern Ireland and more generally that we continue to do all we can to restore an Executive and to ensure that the parties are able to resolve the outstanding issues and get devolved government back up and running at the earliest opportunity.

The right hon. Gentleman has made this point on a previous occasion. I understand the question of accountability, and I feel this issue very keenly at this point. At this stage, these issues remain devolved. We are seeking to set a headline, outline budget of top-line numbers for each of the different Departments of the Northern Ireland civil service, but we are not seeking to provide a higher level of specificity or detail. Of course I will continue to raise issues with David Sterling, the head of the Northern Ireland civil service, but ultimately he remains accountable under the emergency provisions in the Northern Ireland legislation. He remains subject to the duties outlined in that mechanism. That is the unsatisfactory situation that we remain in. I say to the hon. Member for North Antrim (Ian Paisley) that this might be sustainable for a time, but it cannot continue for an extended period.

Yes, we are in the position that we are in today because it has not been possible to form an Executive and because we do not have functioning devolved government. That is why, regrettably, I am having to introduce this Bill today: to put a legal framework in place to enable the Northern Ireland civil service to continue to spend in the way that it has done, to ensure that public services are able to operate. I believe that a solution remains possible, and that we must use all efforts and endeavours to restore devolved government. I know that the hon. Gentleman’s party and Sinn Féin have indicated firmly that they want to see an Executive restored and up and running, serving the people of Northern Ireland. That is where all our efforts and endeavours must firmly remain.

I agree with the right hon. Gentleman on accountability. The difficult job that the Northern Ireland civil service has had to do is effectively make its best assessment of the outgoing priorities of the outgoing Executive. It is worth noting that a lot of work was obviously done in the relation to the budget before the Executive collapsed at the start of the year—work that the parties had been engaged in closely with the Northern Ireland civil service. None the less, there are challenges and pressures in respect of how the civil service is having to operate under the emergency provisions of the Northern Ireland Act 1998, and issues about accountability and political decision making are felt keenly. There is a lack of accountability at the moment, which is why we want to see the Executive back up and running. Indeed, if an Assembly were restored quickly, the Assembly would be able to do that job. It would be able to look back at the budgeting arrangements and to carry out the normal level of scrutiny. I agree, however, that the situation is unsatisfactory, and we need to see progress and get the devolved Government back up and running at the earliest opportunity.

The powers that the Northern Ireland civil service has been exercising have their limits. Under section 59 of the 1998 Act and section 7 of the Government Resources and Accounts (Northern Ireland) Act 2001, the civil service may only issue cash and resources equal to 95% of the totals authorised in the previous financial year. The powers do not allow Departments to use accruing resources, meaning that the resources available to them are in reality significantly less than 95% of the previous year’s provision. Right hon. and hon. Members will recall that I set out in written statements in April and July an indicative budget position and set of departmental allocations based on the advice of the Northern Ireland civil service. In my written statement on 19 July, I said:

“The exercise of s59 powers cannot be sustained indefinitely”—[Official Report, 19 July 2017; Vol. 627, c. 56WS.]

Although we had not then reached it, I also warned that that critical point was approaching. The resource limits in the absence of a budget are now fast approaching. Without further action, there are manifest risks that the civil service would simply begin to run out of resources by the end of November. 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, which is why we need to take forward this Bill today.

I understand the political point that the hon. Gentleman is making, and he highlights the challenges and pressures. The indicative budget arrangement has in effect meant that the Northern Ireland civil service has largely been able to operate on the basis of a full budget, which was one of the reasons why we set out the indicative arrangements with the affirmation that, should it come to it, we would bring forward a budget Bill. We are taking steps today to follow through on that, because of the need to have finances in place. We obviously have not had an Executive, which is why we are in this situation.

Efforts have been undertaken to find an agreement, and I commend the DUP for its work and the ongoing discussions with Sinn Féin to find that agreement. We want to see an enduring power-sharing Executive who are able to get on with the job and to make the high-level budget decisions that we are being forced to take in this Bill. I recognise, however, the frustrations that are felt right across Northern Ireland about not having an Executive in place that are able to make such decisions.

I will give way to the hon. Lady, because I have already given way to the right hon. Gentleman.

I welcome the insight and experience that the hon. Lady brings to this House from her time in the Assembly and from her contribution to politics in Northern Ireland. She and I had discussions on a range of issues during that time.

The point is that we do not have a budget in place, which is why we are having to take these steps today to ensure that the necessary financial stability is provided to the Northern Ireland civil service in the absence of an Executive, an Assembly and functioning devolved government. I am sure that various different political points can be made, but my focus is on seeing that we get the Executive back in place, and I encourage all parties, with renewed focus, to see that discussions continue and that we actually get the resolution that I believe Northern Ireland would like to see.

I am grateful to the right hon. Gentleman for highlighting the real life impacts of historical institutional abuse. It is not some sterile debate on numbers. A whole range of decisions have not been taken. Impacts are being felt across Northern Ireland by public services, by the voluntary and community sector and by victims and survivors of incidents of the past.

I acknowledge the strength of feeling on the issue of historical institutional abuse—the inquiry reported earlier this year—and not just the frustration but the pain and hurt felt by those who want a response to the Hart inquiry’s recommendations. The lack of an Executive has meant that there has been no formal response. Obviously, it was the Executive who commissioned the report, and it was intended that the inquiry would report back to the Executive for their response.

I have met SAVIA, which advocates for survivors and victims, and I met it again in July 2017. I firmly recognise the points it raises. However, this remains a matter for devolved government in Northern Ireland. I understand the huge frustration, which is another significant reason why we need to see devolved government restored. This issue remains a firm priority.

The hon. Gentleman makes a powerful and important point about the impact on victims, but nothing in this Bill gives that authorisation to me; nothing changes in the day-to-day operations of decision making in Northern Ireland. This Bill is firmly not direct rule; we are seeking to give the headline approvals for Departments to operate within their usual flexibilities. The Northern Ireland civil service has published separate estimates, and we have published separate estimates on its behalf, but this is in that space that exists. I have met the victims and survivors groups on two occasions, and there has not been a response to the recommendations as yet. It is right that an Executive, having asked for that report, should be the one that responds to it. I know that this is something of great hurt and great pain, which is why I hope earnestly that we are able to see a resolution of it quickly. I believe the families want that sense of progress against the recommendations.

The hon. Gentleman makes an important point, but it presupposes that there is broad agreement on the recommendations from the Hart report—

I am talking about all the recommendations contained in it. My understanding is that we do not have that formal response back, because we have not had the Executive in place. Therefore, this Bill is not about specifying how the Northern Ireland civil service should operate and take certain actions—that takes us down the pathway on day-to-day decision making and what the Northern Ireland civil service should do. That is why I say firmly and clearly that what needs to happen is that we have that Executive back in place to receive that report. I know, from what the head of the Northern Ireland civil service David Sterling has said to me, that it had been preparing advice and a response that an incoming Executive can take up very quickly. That is the right way to respond, but of course I recognise keenly the frustrations that victims and survivors have felt. I know that from the direct exchanges I have had with them.

I am sure David Sterling will hear keenly what is being said across the House today on the points that SAVIA has been making to all of us in its meetings and on the desire to see the Hart recommendations advanced, responded to and, where they have been accepted, taken forward. I am sure this House has given that message to David Sterling in relation to what has been said. As I say, and as the hon. Gentleman will know, David Sterling has equally been receiving representations from political parties in Northern Ireland and from SAVIA directly. We have heard about the response he has given and the situation we are currently in—not having an Executive or other means by which to provide direct political instruction. None the less, I know that the Northern Ireland civil service takes its responsibilities and its duties within the law—within the framework in which it is operating—keenly to heart. I am sure it will act appropriately, recognising the points that parties in Northern Ireland have made on this issue, and will do what it can to advance this issue in the difficult and frustrating circumstances we find ourselves in.

I am going to make some progress if I may. I have been generous in taking interventions, as I hope Members will recognise.

To be clear, this Bill is a measure we have deferred for as long as was possible. We wanted to see the parties reach an agreement and take a budget through themselves. In the absence of agreement, this Bill is necessary to keep public services running in Northern Ireland. Although it is a Government Bill, it is not a UK Government Budget; it does not reflect the priorities or spending decisions of me or any other Minister. Rather, it sets out the departmental allocations and ambits that have been recommended by the Northern Ireland civil service. In turn, it 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, this is the budget that a returning Executive—had one been formed—would have been presented with. Taken as a whole, the Bill represents a necessary measure, taken at the latest possible point, to secure public finances in Northern Ireland.

We should be absolutely clear: 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, as I hope will be the case, the parties come together to form an Executive in the weeks ahead, those decisions would fall to them, so nothing we are doing today precludes talks from continuing and an agreement being reached.

I propose to turn briefly to the contents of this 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 Consolidated Fund of Northern Ireland. 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, is 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 the main estimates, together with revenue generated locally within Northern Ireland. There is no new money contained within this Bill: there is simply the explicit authority to spend in full the moneys that have already been allocated.

I say to the hon. Gentleman that what we are actually dealing with here is the full utilisation of the resources set out by this House through the block grant. Although there are emergency powers operating that can only cover 95% of the previous year’s budget, by passing this Bill we are authorising the full amount—in effect, allowing a spend to 100%. In practice, the Northern Ireland civil service has effectively been operating to that level by virtue of the assurance that we provided by saying that if a budget was not set, we would set a budget. We are therefore now following through on the commitment that we gave to the Northern Ireland civil service.

I refer the hon. Gentleman back to the statements I made earlier in the year in respect of the indicative budget figures, and therefore the resources that were available to the Northern Ireland civil service and, effectively, the main estimates position. In essence, the difference between the 2016-17 budget position and the main estimates position for this year, once certain figures that relate to a voluntary exit scheme are stripped out to make it more comparable, is a 3.2% increase in the non-ring-fenced resource departmental expenditure limits. That is effectively what we are doing through the measures we are taking through the House today.

I appreciate that there is a sense of, “Well, what is the 95%? What is the 100%?”. The 95% is effectively the restriction that has been placed on the Northern Ireland civil service in its operations to date. We have received advice from the Northern Ireland civil service, and it has been confirmed by the Treasury as well, that that threshold—those limitations—would risk being exceeded at the end of this month, because that 95% does not deal with certain accruals and certain other numbers, which means that the 95% number is actually less than one would imagine it to be. I appreciate that there is a lot of technicality and that a lot of accounting issues are obviously engaged here, but that is what we are seeking to do. In other words, there is no new money beyond what Parliament has already authorised through the main estimates and through votes in this House. I hope that, as best as I can do, I have made that point clear for right hon. and hon. Members.

I am happy to try again with the hon. Gentleman.

As I indicated to the hon. Gentleman, we are effectively talking about a sum of £10.6 billion for the departmental expenditure limits. For that figure, he will be able to refer back to previous statements I have made. The Northern Ireland civil service has made a further adjustment of £54 million, within that envelope, and it has allocated that money primarily to health and education: an additional £40 million to health and an additional £10 million to education. As I indicated to him earlier, if we look at the distinction between the 2016-17 and 2017-18 resource departmental expenditure limits, we see that it shows a movement from around £10.2 billion to £10.6 billion, which is where the 3.2% figure I quoted to him comes from—that year-on-year comparison. That means that, for example, on the budget lines of health there is a 5.4% increase, and for education there is a 1.5% increase. The Northern Ireland civil service and the Department of Finance have published full numbers in relation to the estimates and a further budget briefing. That briefing has been provided to all the political parties in Northern Ireland, in recognition that this is ultimately about a devolved budget, not a budget that is being set here in Westminster.

I understand the point that the Chair of the Northern Ireland Affairs Committee makes. Equally, though, we brought the Bill before the House in such a way as to allow as much flexibility as possible for potential alternative legislation to be debated in the House today. Nevertheless, we are taking this budget Bill through the House, so the detailed information that the Northern Ireland civil service has provided—and, obviously, the allocations—is provided in the Bill.

The details were published in the main estimates document that has been published as a Command Paper. We have sought to provide information on the detailed breakdown to right hon. and hon. Members, but I can nevertheless assure the hon. Gentleman about the nature of the work that has been undertaken. We have relied on the advice from and input of the Northern Ireland civil service in respect of these matters. As I have already indicated, the numbers and figures effectively point back to the indicative statements that I published for the House earlier in the year, with the addition of the adjustments in relation to the £54 million that I have sought to explain to the House today.

The Bill would ordinarily have been taken through the Assembly. I recognise that there are imperfections and that we are having to do this in this House in a way that does not reflect how the Assembly itself would have considered the legislation and taken it through. That is why, for example, there are in clause 5 a series of adaptations that ensure that, once approved by both Houses in Westminster, the Bill will effectively be treated as if it had been taken through the Assembly, thereby enabling Northern Ireland’s 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, which are no longer operative. Such repeals are regularly included in Assembly budget Bills.

The hon. Gentleman and I did have a conversation outside the House before we entered the Chamber, and I understand the point he makes about pay awards—particularly with respect to the PSNI, although it is not simply limited to the PSNI—and the issues with being able to advance where there has not been a previous political policy or agreement on those awards. I recognise the point that he makes very firmly. I will have further discussions with David Sterling about whether there is any way to resolve that issue in the absence of an Executive. I know that this issue has been and continues to be a particular concern among a number of public sector employees. It is a result of the gap that we are currently in, so we need to get this resolved quickly.

Although there is not a functioning Executive—in other words, we do not have the First Minister and Deputy First Minister in place—work is still going on. The civil service has to manage the process in the absence of that political decision-making. I will certainly take the hon. Gentleman’s point to the head of the Northern Ireland civil service and commit to write to him with a more detailed response, a justification for the increases and an explanation of why, on that particular budget line, there was a need for such a decision. Certainly, the civil service has stated very clearly that it has acted on the basis of the outgoing priorities of the outgoing Executive.

As the debate this evening has demonstrated, this is clearly an unusual Bill to be taken through the House, marking as it does an approval by Parliament of spending in the devolved sphere. While being proportionate, I 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 provisions in the Bill for scrutiny by the Northern Ireland Audit Office of the Northern Ireland Departments, I will be writing to the Comptroller and Auditor General for Northern Ireland asking him to send me a copy of all the NIAO audits and value-for-money reports that he produces after the Bill gains Royal Assent, which will contain his view on any shortcomings and his recommendations for improvement. I will be asking the Northern Ireland civil service to make its responses to those reports available to me. Copies of those reports and correspondence will be placed in the Libraries of both Houses to allow scrutiny by all interested Members and Committees.

I have also laid before the House as a Command Paper a set of estimates for the Departments and bodies covered by the budget Bill. Those estimates, which have been prepared by the Northern Ireland Department of Finance, set out the breakdown of its resource allocation in greater detail. As hon. and right hon. Members 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 approved separately.

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 the spending impacts they will have, the Northern Ireland civil service has produced a budget briefing paper, which was published on the Department of Finance website earlier today. It is also important to note that the Northern Ireland political parties have been briefed on this budget in detail. That is everything in the Bill, dealing with moneys already voted for by Parliament or raised within Northern Ireland. Those figures do not deal with any other items.

If the hon. Lady will bear with me, I intend to say something about that issue later in my comments.

Before I do so, I will comment on issues outside the Bill. The figures contained in the Bill do not secure the financial position for the long term, because 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 are other steps, too. It was in recognition of those unique circumstances that the UK Government were prepared to make available additional financial support earlier this year, following the confidence and supply agreement between the Conservative party and the Democratic Unionist party. 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. However, 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.

Therefore, in addition to the Bill, this Government will make available the £50 million for addressing immediate health and education pressures in the agreement in this financial year. Those sums are not contained in this Bill, because they have not yet been voted on by Parliament. If the Northern Ireland Administration confirm that they wish to access them, they will be subject to the full authorisation of this House, 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.

As the right hon. Gentleman will know, we recognise the particular case that has been made by Northern Ireland about the pressures in the health service that stem from the need for reform. The sums are still subject to a formal vote in the House, but that cannot be dealt with today. It can be dealt with only through the subsequent estimates process. In the absence of an Executive, it would be for the Northern Ireland civil service, 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. I say to the House that 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 of the whole community. That remains the case now as much as ever. As a party, we believe in devolution. We want to see locally elected politicians taking the strategic decisions about the future direction of their local areas.

Let me come back to the point made by the hon. Member for North Down (Lady Hermon). In this context, I understand the disappointment that so many feel that, despite the election more than eight months ago, there remains no functioning Assembly in which all those elected may serve. I also know that, in turn, many in Northern Ireland are concerned that full salaries continue to be paid to Assembly Members despite the impasse. I understand that concern, but recognise, too, 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 I have been keen to seek independent advice on the subject in determining what actions may be appropriate. I can tell the House that Mr Trevor Reaney, a former Clerk of the Northern Ireland Assembly, has agreed to take on that task. He will provide an independent assessment of the case for action and the steps he would consider appropriate, and will report back to me by 15 December. This will not prejudge any particular course of action, not least as further steps would require primary legislation, but his advice will help to inform the best way to proceed.

This point has been raised on the Floor of the House before. The right hon. Gentleman makes a powerful presentation of his point. Equally, although I note his firm point, he has sought to advance this case in the past and knows that the matter is one for the House to determine.

I very much hope that the work I outlined—the recommendations or review that I will receive regarding MLA pay—will not be needed. That is because I still believe and hope that the parties can resolve their differences and an Executive can be formed that will come together and take the strategic decisions needed on health transformation, education reform and building a 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.

I will give way later, but I am just going to finish my comments.

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, with 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. But at the same time, the Government are ultimately responsible for good governance in Northern Ireland and will do whatever is necessary to provide that. The Bill is a reminder of that underlying obligation, which we will continue to uphold. I commend it to the House.

I point the hon. Gentleman firmly towards our proposals on customs and agriculture, as well as on issues such as the common transit convention. On a whole raft of issues, we have set out our determination to achieve that aim and how we believe it will be achieved. We are engaging in the first phase and into the second phase to make sure that that happens.

With permission, I would like to make a statement about the current political situation in Northern Ireland.

As the House is aware, Northern Ireland has been without a properly functioning devolved Executive and Assembly for nine months. During this time, the Democratic Unionist party and Sinn Féin, as the two largest parties in the Assembly, have been engaged in a series of discussions to restore inclusive, power-sharing government at Stormont. The latest phase of the discussions began in August and has run for the past nine weeks.

It is the responsibility of the parties to reach an agreement, and the Government have been working tirelessly to support this process. In addition, I have kept in regular contact with the Ulster Unionists, Social Democratic and Labour party and Alliance, as well as with representatives of business and civil society. My right hon. Friend the Prime Minister has also remained closely involved throughout the process and has held a number of discussions with the leaders of the DUP and Sinn Féin, as well as keeping in contact with the Taoiseach, Leo Varadkar. In addition, the Irish Government have been involved in the process, in accordance with the well-established three-stranded approach to Northern Ireland affairs. I would like, in particular, to acknowledge the contribution of the Irish Foreign Minister, Simon Coveney.

Our efforts have been focused mainly on bridging a small number of differences between the two largest parties—particularly around language and culture—that have prevented a sustainable Executive from being formed. While important progress has been made, the parties have not yet reached an agreement. Therefore, I am not in a position to bring before the House the legislation necessary for an Executive to be formed this week.

The consequence of this is that it is now highly unlikely that an Executive could be in place within a timetable to be assured of passing a budget by the end of November, which is the point at which we and the Northern Ireland civil service assess that Northern Ireland will begin to run out of resources. No Government could simply stand by and allow that to happen, and we would be shirking our responsibilities to the people of Northern Ireland were we to do so. That is why the Government will take forward the necessary steps that would enable a budget Bill to be introduced in the House to protect the delivery of public services in Northern Ireland.

This budget Bill would deal only with the current financial year. It would incorporate figures provided by the Northern Ireland civil service, reflecting its assessment of the outgoing priorities of the previous Executive. It would not set out any spending decisions by me or the Government. As my right hon. Friend the Leader of the House has indicated, I would expect the budget Bill to be considered in this House shortly after the November recess.

Subject to parliamentary approval, this Bill would give the Northern Ireland civil service certainty to plan for the rest of this financial year, by giving the necessary legal authority to spend to existing plans. I would like to take this opportunity to put on the record my deep appreciation for the professionalism of the Northern Ireland civil service in maintaining public services during this very difficult time.

The Government’s strong desire would be for a restored Executive in Northern Ireland to take forward their own budget, so I am taking this step with the utmost reluctance and only in the absence of any other option. I want to make it clear to the House that passing a budget in Westminster does not mark a move to direct rule any more than the passing of legislation by this House to set a regional rate did in April. Furthermore, it is important to emphasise that this is not an obstacle to continued political negotiations and that the Government will continue to work with the parties with that clear intent.

Even now, however unlikely it may be, should the parties demonstrate that an Executive can be formed in the immediate future, I would clearly wish to proceed with legislation to allow that to happen, on the condition that a means could be created to provide an expedited procedure on an exceptional basis to enable the budget to be passed by the end of November.

In addition to preparations for budget legislation and in recognition of the strength of public concern, I will reflect carefully on the issue of salaries for Assembly Members. This is a devolved matter and I cannot intervene without primary legislation in Westminster. As I recently told the Northern Ireland Affairs Committee, in the continued absence of a functioning Assembly, the status quo is not tenable. I will therefore be seeking independent advice on MLA pay and on what steps may be taken to reflect the current circumstances.

I still hope that the parties can resolve their differences and that an Executive can be formed. We will continue to work with them and support them in their efforts. 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—to see locally elected politicians making decisions for the people of Northern Ireland on key local matters, such as health, education, transport and economic development.

We are clear that Northern Ireland needs a properly functioning and inclusive devolved Government, along with effective structures for co-operation north-south and east-west, but ultimately the Government are responsible for good governance in Northern Ireland and will do whatever is necessary to provide that. I commend this statement to the House.

I thank the hon. Gentleman for his comments in support of the proposals to bring forward a budget Bill and about the necessity of having the financial stability that will help the Northern Ireland civil service to continue with the work that it has already been doing in ensuring that public services are delivered and that there is that focus on the people of Northern Ireland. I acknowledge the rightful support that he has given to all those in the Northern Ireland civil service engaged and involved in this important work.

I agree with the hon. Gentleman about the profound disappointment at not finding a resolution to date. Northern Ireland needs devolved government. I profoundly believe in devolution and the sense of locally elected politicians making decisions locally and being held accountable by an elected Assembly locally. That is profoundly in the best interests of Northern Ireland. He talks about other options. My focus remains very firmly on how we see devolution restored; I think that anything else is a backward step. There are, yes, concerns about the delivery of public services while we are taking the step that we have outlined today. Ultimately, this simply cannot carry on for ever. We need to ensure that political decision making is taking place.

The hon. Gentleman highlights issues around the process and the steps to follow on from it. I stress that bringing forward the budget Bill should not mark an end to the talks. Indeed, the parties themselves have indicated that they remain committed to finding a way forward in seeing how discussions between the DUP and Sinn Féin can continue in order to find resolution on, yes, a small number of issues where difference firmly remains between the two parties. While there has been positive progress on a number of fronts during certain weeks, we are not, as I have indicated to the House, at the point of reaching agreement.

The hon. Gentleman highlights the potential role of the Prime Minister. She has been actively involved in talking to the parties. She has had meetings with the parties at No. 10, bringing them together. She does remain actively involved, including through continued discussions with the Taoiseach, in finding the right way that we can work together as two Governments to ensure that there is a co-ordinated approach that is respectful to how these issues in respect of Northern Ireland are undertaken.

The hon. Gentleman makes points about interventions and suchlike. Clearly, we do keep these issues under careful review, and I do not rule anything out in respect of the way forward. We want the engagement between the two parties that has been undertaken in earnest, in a concerted way, to continue. They have shown that they can make progress in that format, and we want to support them in continuing with that. I earnestly want to see the restoration of the devolved settlement—of the institutions that are at the heart of the Belfast or Good Friday agreement and underpin the framework that we have in Northern Ireland. I want that to be restored at the earliest opportunity, and we are doing all that we can as a Government to see that it is brought about.

The hon. Gentleman makes certain points in relation to the economy and various other things. Universal credit is about making work pay. It is about how we get people back into work, seeing those pathways, and seeing that things are supported. We are looking very carefully at how it is implemented in Northern Ireland. In response to his comments about the position of Northern Ireland, I would point to the picture of prosperity, of jobs, and of an economy that is growing—and to tourism, with more people coming to Northern Ireland. That is a positive picture of what Northern Ireland is and what it can be. I encourage him to underline that in the messages that he gives.

I commend my hon. Friend for the work of his Committee, which has had a clear focus on and interest in the issues around Brexit and Northern Ireland. I am sure that it will continue to do so. The evidence that it has been producing has been very helpful and informative. This Government want to see the most positive outcome for the United Kingdom as a whole, very firmly including Northern Ireland. That is why we published the paper during the course of the summer highlighting how we can deal with this effectively to see the positive outcome that I know can be achieved for Northern Ireland as the United Kingdom leaves the European Union. We will certainly continue, as we have done throughout the first phase of the negotiations, to underline the specific factors and elements in Northern Ireland to ensure that they are addressed effectively and that the unique circumstances of Northern Ireland are recognised. We will continue to work with the Northern Ireland civil service, and the parties in Northern Ireland too, to ensure that those unique factors are addressed. I am determined that that is what the outcome will be.

I will follow up with the hon. Lady on that point after the statement. It is certainly not my intention to prevent her from being properly briefed in advance of statements; that is not how I operate. I will make inquires after the statement and revert to her to ensure that she is kept properly informed, in the usual way. I take seriously the point that she has raised, and I will pursue it to ensure that there is no repetition of the situation.

The hon. Lady made several points about the outstanding issues. As I have indicated, I think we are talking primarily about sustainability in respect of the Assembly and the Executive, and about issues of language, culture, identity and respect. Those have been underlying elements in our discussions, over many weeks, and it is important to get them right to provide a sense of sustainability and allow the Executive to get on with the job of serving Northern Ireland. I think that politicians on all sides seek earnestly to get those things right.

It is, ultimately, for the parties to reach agreement. Yes, we have worked with them and encouraged them, and we recognise our responsibilities as a Government under the various agreements that we hold, but the parties need to be accommodating and reach agreement. No agreement has yet been reached, so we are having to take the next step that I have set out in the statement today. The budget is necessary to put Northern Ireland’s public services and finances on a sound footing. We will continue to support the parties to find agreement, in the knowledge that the situation cannot continue indefinitely.

The hon. Lady highlights the election duty that I continue to be under, in legislation. I have to keep the matter under review, knowing that that is the only power that I have in law. I want resolution and agreement, because that would be the best possible outcome.

I pay clear tribute to the incredible service, bravery, dedication and sacrifice of all who served to uphold the rule of law and secure the political freedoms in Northern Ireland that we enjoy today. I hear the point that my hon. Friend makes about the concern about witch hunts and the operation of the system. I want to move forward with a consultation around the Stormont House agreement that sets out new institutions and bodies that are firmly intended to be balanced, proportionate, transparent, fair and equitable, thereby ensuring that soldiers are not unfairly treated. That, I believe, is the right way forward, and it will give everyone the opportunity to contribute and express their point of view. Ultimately, it will allow us to move forward with those institutions, which I firmly believe represent the best way forward.

I support the right hon. Gentleman’s message about the need for Northern Ireland to get on with the job and the need to restore devolved Government. He makes several points about how that can be done. His party is closely involved in the negotiations with Sinn Féin, and in the work that has been done and the efforts that have been made to restore devolution. I say again that that has to be the focus. The optimum outcome is to have a functioning locally elected Assembly and Executive serving the people of Northern Ireland.

I encourage the right hon. Gentleman and his party to continue the efforts that they have made over an extended period to find the way forward, look for a space of agreement and provide a sense of stability for Northern Ireland. We all want agreement to be reached to make it possible to deal with public services, deal with the economy and encourage jobs and growth. The public in Northern Ireland want that service and positive movement. I underline the fact that we must all have that resolute focus in our minds in the weeks ahead and work to achieve that outcome, so that decision making can progress in Northern Ireland.

I am grateful to my hon. Friend for the point that he has made. As I indicated in my statement, should an agreement be reached that enables an Executive to be put in place quickly—however unlikely that is—I would obviously not want to introduce the budget Bill. There are important steps that we have to take, however. The civil service has underlined to us that the end of November is a crucial time, by which they need the budget to be in place. That is why I am taking the steps that I have outlined today. This is not about the UK Government setting the spending priorities; that remains firmly with the Northern Ireland civil service, which will continue to get on with that job, as it has done over recent months. That is why I have made the point that this is not about direct rule or UK Government Ministers setting the individual priorities. It is important to resolve the issue quickly for all the reasons we have heard today, and that is where our earnest focus must lie.

I acknowledge the presentation that the right hon. Gentleman, with the experience of his role in Northern Ireland, makes about the challenges and the fact that this is not the outcome we want. As we have made clear throughout the process, the budget Bill speaks to the main estimates that were put in place earlier this year. We are operating within that framework. It is open to the House to vote, through supplementary estimates, for further moneys to be made available to Northern Ireland during the course of the financial year; and votes in this House obviously matter. As a Government, we stand by our commitments, and as a party, we stand by the agreement reached with the Democratic Unionist party, and nothing I have said today changes that.