Northern Ireland Budget (Anticipation and Adjustments) Bill

Karen Bradley Excerpts

2nd reading: House of Commons & 3rd reading: House of Commons
Tuesday 20th March 2018 Commons Chamber

[The Secretary of State for Northern Ireland (Karen Bradley)]

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

As I set out to the House in my statement last week, in order for the UK Government to uphold their commitments to govern in the interests of all parts of the community in Northern Ireland, a series of steps are now required to safeguard public services and finances. This Bill represents the first of those steps, with further legislation scheduled to follow tomorrow. I should say at the outset that I take these measures with the greatest reluctance; I have deferred action here until it was clear that it would not be possible for a restored Executive to take this legislation forward. But as we approach the end of the financial year, it is important that we proceed now to give certainty as the Northern Ireland civil service looks to continue to protect and preserve public services.

Last year, the UK Government had to step in to ask Parliament to legislate for a 2017-18 budget for Northern Ireland. Again, that was not a step we wanted to take, but it gave the Northern Ireland civil service the clear legal basis required to manage resources and perform the important work it continues to do in the absence of an Executive. The legislation we passed, the Northern Ireland Budget Act 2017, did not set out any direction for how spending decisions should be made; instead it set out in law departmental spending allocations, within which permanent secretaries could deliver on their respective responsibilities. That Act was passed in November, and since then the Northern Ireland civil service has continued to assess where pressures lie across the system and has reallocated resources, as required. In addition, the UK Government committed in November to providing £50 million of support arising from the financial annex to the confidence and supply agreement, to address immediate health and education pressures. Of that, at the request of the Northern Ireland civil service, we agreed that £20 million would be made available in 2017-18, with the remainder to form part of the resource totals available in 2018-19. That additional funding was confirmed in the Supply and Appropriation (Anticipation and Adjustments) Act 2018, which received Royal Assent last week.

As we approach the end of the financial year, those changes must now be reflected in the legal spending authority provided to the Northern Ireland administration, and that is what this Bill does. In addition, it would provide for a vote on account for the early months of next year, to give legal authority for managing day-to-day spending in the run-up to that estimates process. Right hon. and hon. Members may recall that there was no such action this year, with no budget legislation for Northern Ireland before November. This meant that the Northern Ireland civil service had to rely on section 59 of the Northern Ireland Act 1998, and section 7 of the Government Resources and Accounts Act (Northern Ireland) 2001 to issue cash and resources. Those are emergency powers, intended to be used only in the absence of more orthodox legal authority. As we take forward legislation to formalise the budget for last year, I do not consider it would be appropriate if we did not provide the usual vote on account facility to the NICS—a facility we had provided to UK Government Departments through our own spring supplementary estimates process.

To be clear, this is not a budget for the year ahead. The Bill does not seek to set out in legislation the departmental allocations I outlined in my written statement on 8 March. Those will be taken forward via a budget Bill in the summer, exactly as is the case for the United Kingdom finances as a whole. Of course, I hope that this budget Bill will be brought forward by a restored Executive. We must, however, be prepared for the potential that it will again fall to this Parliament to provide budget certainty for the NICS. Nor does the Bill seek to vote any new moneys for Northern Ireland. The totals to which it is related are either locally raised or have been subject to previous votes in Parliament, most recently in the Supply and Appropriation (Anticipation and Adjustments) Bill.

Instead, this Bill looks back to confirm spending totals for 2017-18, to ensure that the NICS has a secure legal basis for its spending in the past year. As such, it formally allocates the £20 million of confidence and supply funding already committed for 2017-18; it is not concerned with any of the £410 million set out in my budget statement, which will be a matter for the UK estimates in the summer, and for a Northern Ireland budget Bill thereafter. Taken as a whole, it therefore represents the minimum necessary intervention to secure public finances at this juncture.

I will turn briefly to the contents of the Bill, as this will largely rehearse the discussion that my predecessor, my right hon. Friend the Member for Old Bexley and Sidcup (James Brokenshire), whom I know will be with us when he has finished dealing with a piece of secondary legislation he is involved with upstairs—[Interruption.] He is here—good. This will rehearse the discussion he had when bringing the Northern Ireland Budget Act 2017 before this House. I am delighted to see him here and I know he will contribute later when he has served on the secondary legislation Committee upstairs.

In short, the Bill 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 £16.1 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 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). Clause 3 sets revised limits on the accruing resources, including both operating and non-operating accruing resources in the current financial year. These are all largely as they appeared in the 2017 Act, and the revised totals for Departments appear in schedules 1 and 2 of the Bill.

Clause 4 does not have a parallel in that Act. It sets out the power for the NICS to issue out of the Northern Ireland Consolidated Fund some £7.35 billion in cash for the forthcoming financial year. This is the vote on account provision I have already outlined. It is linked to clause 6, which does the same in terms of resources. The value is set, as is standard, at about 45% of the sums available in both regards in the previous financial year. Schedules 3 and 4 operate on the same basis, with each departmental allocation simply set at 45% of the previous year’s. Clause 5 permits some temporary borrowing powers for cash management purposes. As I have already noted, these sums relate to those which have already been voted by Parliament, 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.

[Lady Hermon (North Down) (Ind)]

The Secretary of State will be well aware that under the allocation to the Executive Office, the detail in the Bill refers expressly to

“actions associated with the preparation and implementation of the Historical Institutional Abuse Inquiry Report and Findings”—

the Hart report. What exactly is going to be implemented and done? It is long overdue—what is going to happen in Northern Ireland as a result of this Bill?

[Karen Bradley]

The hon. Lady and I have discussed this matter in the Northern Ireland Affairs Committee and in the House. As I have said, the Bill agrees the money that has already been spent in respect of the Hart inquiry. That inquiry was set up by the Executive, so it is quite right that the Bill agrees that the money that has already been spent has been properly and lawfully spent.

On the treatment of the victims of historical abuse, the hon. Lady will know that we all want those victims to get the justice that they so rightly deserve. She will also know that the inquiry was set up by the Executive, so the recommendations should rightly be dealt with by the Executive. It is a great shame that we do not have an Executive to deal with these things, but it would be constitutionally inappropriate for this House to determine the actions that should be taken in respect of those recommendations, because this House did not set up the inquiry; it was set up by the Executive, which is the right place for the recommendations to be considered and for the decisions about those recommendations to be taken. I am well aware of the hon. Lady’s point, though, and we will continue to discuss it.

Ordinarily, the Bill would have been taken through the Assembly. As such, there are a series of adaptations in clause 7 that ensure that, once the Bill is approved by both Houses in Westminster, it will be treated as though it were an Assembly budget Act, enabling Northern Ireland public finances to continue to function, notwithstanding the absence of an Executive.

Alongside the Bill itself, I have laid before the House as a Command Paper a set of supplementary estimates for the Departments and bodies covered by the budget Bill. The estimates, which have been prepared by the Northern Ireland Department of Finance, set out the breakdown of the resource allocation in greater detail. As hon. and right hon. Members may note, the process is different from that which we might ordinarily see for estimates at Westminster, where the estimates document precedes the formal Budget legislation and is separately approved. That would also be the case at the Assembly, but as was the case in November, 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.

[Bob Stewart (Beckenham) (Con)]

Assuming an Executive is reconstituted at some stage during the year—perhaps, say, in six months’ time—would members of that Executive have any ability to fiddle, change or adjust the budget that my right hon. Friend is proposing, or is it set for the year?

[Karen Bradley]

My hon. and gallant Friend is correct that members of the Executive would have the power to change the allocations set out in the budget and to change the decisions that have been taken. He will know that, as I set out in my statement last week, what I did was the bare minimum required to allow the NICS to continue to function and deliver public services. Of course, there are many political decisions that it would not be appropriate to take in this place because we do not have the executive power to do that. The Executive would have that power, so I urge Members of the Assembly to do what they can to come back to Stormont so that they can take Executive decision-making powers there.

I hope hon. and right hon. Members will agree that this is very much a technical step that we are taking as we approach the end of the financial year. It looks backwards rather than forwards, although it does avoid the use of emergency powers for the forthcoming financial year.

[Lady Hermon]

I am extremely grateful to the Secretary of State for allowing me to move on to a completely different topic: the Independent Reporting Commission. Given the sad and most regrettable rise of loyalist paramilitary activity in North Down, I am curious to know what exactly the Independent Reporting Commission, which was set up a previous very distinguished Secretary of State, the right hon. Member for Old Bexley and Sidcup (James Brokenshire), who was in the Chamber earlier but is not present at the moment, does for its money. Paramilitary activity seems to be increasing instead of decreasing, which was its remit when it was set up.

[Karen Bradley]

I had the privilege of meeting Mitchell Reiss when I was in the United States last week, and I think several Opposition Members may also have had the chance to meet him. I expect the Independent Reporting Commission to report its interim findings shortly. Its members will be visiting Northern Ireland shortly, at which point I expect to have a meeting with them. I am well aware of the point that the hon. Lady mentions—it was something I discussed with Mr Reiss in the United States.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

Funding that is apparently destined for the implementation of the recommendations of the Hart report is quite correctly covered in schedule 2, but it is also covered in schedule 3, which seems to conflict slightly with the point made earlier. Will my right hon. Friend clarify the situation? Schedule 3 appears to anticipate spend on the Hart inquiry, which we would all welcome, but she has not said this explicitly.

--- Later in debate ---

[Karen Bradley]

I thank my hon. Friend the Chair of the Select Committee for that point. As I said earlier, the forward-looking expenditure is merely to approve, in the way we would do in the normal Budget process in this House, 45% of spending. We have done exactly the same allocations as in the previous year to enable the moneys to be spent, but the Bill does not give decision-making power to say how the money should be spent; it merely gives approval for money to be spent by those Departments so that they can continue to function. I appreciate that it is not an entirely satisfactory situation, but it is what is required to enable the Departments to continue to function and provide public services. In summer we will of course come through with the full budget process, which I hope will be done by a restored Executive at Stormont. If not, it will have to be done in this House.

[Ian Paisley (North Antrim) (DUP)]

The Secretary of State will know my interest in making sure that it is the perpetrator who pays and is punished, not the taxpayer. Will she ensure that if there is not an Assembly in six months’ time, it will be the institutions that perpetrated those false and indeed horrible, pernicious attacks on innocent individuals that are made to pay, and that it will not be the taxpayer picking up the bill?

[Karen Bradley]

The hon. Gentleman’s comments indicate to the House that there is perhaps not universal support for every recommendation from the Hart inquiry. That is why it is important that we have a restored Executive in Stormont that can make the decisions about those recommendations and enable justice to be delivered.

[Nigel Dodds (Belfast North) (DUP)]

The Secretary of State confirmed the legal position of the Bill and what it purports to do and will do, if passed. Will she confirm that, in respect of the written ministerial statement that allocated £410 million of the confidence and supply money, Government Departments in Northern Ireland will be able to plan on spending that money as of the start of the financial year?

[Karen Bradley]

The right hon. Gentleman is absolutely right. The statement sets out the departmental allocations; the Bill gives parliamentary approval for Departments to start to spend that money. That is what is required to enable that spending to start at the start of the financial year, but it does not set the final allocations; it merely gives approval such that Departments can start to spend. In effect, Parliament is saying that the money can now be spent so that public services can be delivered. The right hon. Gentleman is absolutely right that the £410 million from the confidence and supply agreement that is allocated for 2018-19 is in the allocations set out in the written ministerial statement, and the Departments can work on the basis that they can start to spend that money.

The Bill provides a secure legal footing for the Northern Ireland civil service. It is on that platform that my budget statement last week sought to build. That statement will need to be the subject of formal legislation in the summer as a further Northern Ireland budget Bill. As I have already said, that is a Bill that I sincerely hope will be taken forward by a restored Executive. If required, though, that is something that we as the UK Government would be prepared to progress with, as we uphold our responsibilities to the people of Northern Ireland. In the meantime, it is those allocations that provide the basis for the NICS to plan and prepare to take decisions for the year ahead.

[Mr Gregory Campbell (East Londonderry) (DUP)]

We all, of course, want to see the Executive restored, but, in the absence of that in the medium term, does the Secretary of State agree that the way in which we are bringing this process forward, while not satisfactory, is at least progress? However, we need to see further progress in how that money is spent on the ground on much needed services.

[Karen Bradley]

I thank the hon. Gentleman for his contribution. I agree that we all want to see devolution restored. As I have said, I am doing this reluctantly, but I am doing what is required to enable public spending to continue and public services to be delivered. I pay tribute to the civil servants and other public servants who have worked tirelessly for the past 14 months doing exactly that work, and I want to make sure that they can continue to do so.

[Dr Murrison]

My right hon. Friend is being very generous in giving way. I am probably being thick, but can she explain the difference between schedules 3 and 4 —that is to say the difference between “resources authorised” and “sums granted” for the year ending 31 March 2019? Many of the figures look pretty much the same, but clearly there is a difference in the form of words used. I would be very grateful for clarification on that point.

[Karen Bradley]

I suspect that that is a deeply technical point. It would probably be helpful to the members of the Select Committee if I wrote to my hon. Friend and set out exactly what the difference was. However, I want to assure him that we are approving the start of spending, but we are not approving final numbers or how that spending happens as part of the process for 2018-19. What we are approving today is the moneys that have already been spent and making sure that those moneys that have been spent are on a proper statutory footing so that the finances of Northern Ireland and the NICS can be properly dealt with.

As I conclude, I will set out once again a point that I have made several times before: the UK Government are steadfastly committed to the Belfast agreement, and we are completely committed to working to remove the barriers to the restoration of devolution. That is because Northern Ireland needs strong political leadership from a locally elected and accountable devolved Government and that remains my firm goal. However, in its absence, this Bill is a reminder that the UK Government will always uphold their responsibilities for political stability and good governance, and I commend it to the House.

[Owen Smith (Pontypridd) (Lab)]

This is, as the Secretary of State has said, a technical step today. For instant clarity, let me say that we will, of course, support these technical measures and the provisions in the Bill.

I wish to begin by remembering, on behalf of us all in the House, Johnathan Ball and Tim Parry who lost their lives in the IRA atrocity at Warrington 25 years ago today. There has been a commemoration in Warrington today where they are being honoured along with the 54 men, women and children who were injured on that day. I wanted to do that to mark their tragic death and to remind us all of the terrible cost of the troubles and to remind us, too, of the need to complete the journey to reconciliation between communities and to get to a true point of political stability in Northern Ireland. That is something that we should be reminded of today.

[Karen Bradley]

May I thank the shadow Secretary of State for his words? I wish to put it on the record that I add my condolences and thoughts to his. He is absolutely right to reflect that today marks the 25th anniversary of a shocking event that none of us who lived through that time will forget, and it is a stark reminder of how far we have come.

[Owen Smith]

I welcome those words. I was sure that the Secretary of State would reflect on those events.

The Bill does in itself reflect the instability in Northern Ireland and the fact that reconciliation is required. We should remind ourselves, too, that it is actually the seventh year of suspension in the 18 years of the Assembly. It is a measure of some of the problems that we face that we are still in suspension now after 14 months. Other recent comments that have been made in respect of commemorations remind us, too, of the desperate need that we still have for true reconciliation between communities. Although the peace is robust—I know that we all feel that—the reconciliation is still all too fragile.

Notwithstanding the fact that we are discussing a set of technical measures today—it is not formally a budget, as the Secretary of State has explained to us—there are lots of questions to be asked. I hope to pose some of them, including questions about the form of the Bill—what is in it, what is not in it and what should be in it—reflecting some of the comments that have already been made by right hon. and hon. Members.

The first is about the form of the Bill. The Secretary of State said, “We have done something different this year.” She has not done what her predecessor did, which is rely on section 59 of the Northern Ireland Act 1998 to provide 95% of budgets. We have moved to what is in effect a version of the budget and the estimates process that we have for the rest of the United Kingdom at traditional points in the year. The Secretary of State has partially explained why she has done that—because it is an emergency measure—but I still do not completely understand why we have gone down that route. That prompts the question whether this is a further staging post on that famous glide path to direct rule. If that was in the Government’s mind when they went down this route, I urge them to think harder about how they redouble their efforts to try to get things back up and running.

If we are not dealing with a straightforward budget today and if these measures are allocating only 45% of the spending for 2018-19, we will have to have, as the Secretary of State has said, another budget Bill before the summer, which equally makes the point that this is a pretty poor substitute for the sort of scrutiny, intelligence and direction that we would have if we had a Stormont Executive and Assembly setting and scrutinising a budget. Some of the confusion that we have heard about today over the differences between allocations and appropriations and schedules 3 and 4 and about whether we are allowing for spending on the historical institutional abuse inquiry this year is because, effectively, what we have is a piece of cut and paste legislation here. If we read the schedule, it is pretty much exactly, word for word, the same schedule with the same description of the objectives and tasks facing the individual Departments in Northern Ireland as we had in the Northern Ireland Budget Act 2017.

--- Later in debate ---

[Owen Smith]

It will be for the Government and, I hope, for the Executive to make a determination about the balance of payment. My view is that both will have to bear some costs. Some of the Church institutions that were involved will have to bear some of the cost, as happened in the Irish Republic. I think that the costs will be borne by the taxpayers where state-run institutions are involved. The reality is that we all have to recognise—I know that the hon. Gentleman does—that the abuse suffered by those individuals was heinous, and a way must be found for them to be properly compensated. This impasse in Northern Ireland cannot get in the way of that; we need to move forward. In fact, I have a particular question on this matter for the Secretary of State that she might want to listen to.

When I listened to David Sterling, the head of the Northern Ireland civil service, giving evidence to the Select Committee on Northern Ireland Affairs just a month or so ago, my impression was that he is preparing legislation in respect of the HIA. He said explicitly that if there is no Executive in place—he implied by the summer, as that is when the legislation will be ready—he will ask the Secretary of State to introduce legislation in Westminster to give effect to the recommendations of the Hart inquiry. The Secretary of State left a gap at the end of addressing that question, so I just want to be sure that she will introduce such legislation, notwithstanding the fact that we would, of course, like Stormont to do so.

[Karen Bradley]

To be clear, I also heard the evidence given by David Sterling and I have spoken to him about this. Constitutionally, the inquiry was set up by the Executive and reported to the Executive. Unfortunately, the Executive were unable to take decisions on the recommendations before they collapsed. Given the hon. Gentleman’s closeness to this issue throughout his long political career, he will understand that the constitutional implications of the Westminster Parliament or Government taking a decision about something set up by a devolved institution mean that such decisions are not to be taken lightly. But, of course, if David Sterling should write to me with specific requests, I would consider them at that point.

[Owen Smith]

I am grateful to the Secretary of State for that clarification, but she has effectively doubled down on what she said earlier, and that is not good enough. These people have waited long enough. I think that the report came before the Assembly collapsed, and there is widespread political support across the piece that compensation ought to be paid. I therefore hope that, notwithstanding the complications and the sense that we would in some respect be rescinding a measure of devolution, we should find it in this place to legislate and provide the resources. That is the view of the Labour party, and I am sure that the Secretary of State will reflect on that.

[Owen Smith]

The hon. Lady is right. I think that the report came a matter of days after the Executive collapsed. But that does not change my point, which is that there is widespread political support for action. David Sterling clearly thinks that it would be acceptable for us to legislate in this place. I have put on the record that the Labour party thinks that it would be acceptable for us to legislate in this place and that we think that the Secretary of State should do so.

The second area of omission that I wish to bring to the attention of the House is the legacy of the troubles. I know that the Secretary of State is reflecting on this and that it was part of the discussion between the parties in the recent talks that have unfortunately stalled. In the light of the failure of the talks, will the Secretary of State say a little more about whether and how she might bring forward resources and legislation on dealing with the legacy of the past?

[Karen Bradley]

It is probably worth confirming what I have said previously about dealing with the legacy of the past. No doubt, we will talk about this tomorrow during oral questions and the debates on the further legislation that we are bringing forward. I have been clear that the UK Government are committed to setting up the institutions that were agreed in the Stormont House talks process. We will shortly consult on how to set those institutions up, and we remain committed to doing that.

[Owen Smith]

I am grateful to the Secretary of State for that confirmation. I am sure that people in Northern Ireland will find that reassuring. I also ask her to consider the plea made by the Lord Chief Justice of Northern Ireland for a separate set of resources to allow the few remaining legacy inquests to be undertaken in a timely fashion. Some of the people affected are, of course, ill and some have already died. Every passing month leaves injustice hanging in the air. We could also be dealing with that issue in this place.

My third point is that the Bill could and should have included financial provision for a pension for the seriously injured victims and survivors of the troubles. There are still around 500 seriously physically injured survivors, many of whom live in significant financial hardship due to their injuries and the loss of earnings during their lives as a result of the legacy of the troubles. Some believe that we cannot provide a pension for all those 500, as among them are some who were injured by their own hand. I believe that there are six loyalists and four republicans who were injured by their own actions during the troubles. I acknowledge those concerns and the difficulty that this poses. I understand that right hon. and hon. Members have considerable issues with what that would mean for the treatment of victims and for how we move forward in respect of legislation for victims.