Northern Ireland Budget (Anticipation and Adjustments) (No. 2) Bill

Lady Hermon Excerpts

2nd reading: House of Commons
Tuesday 5th March 2019 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 have stated to the House on a number of occasions over the 14 months that I have been in this role, and as my predecessors did previously, the UK Government have a responsibility, in the absence of a functioning devolved Government in Northern Ireland, to ensure good governance and to protect the interests of all parts of the community. We have a duty to safeguard public services and public finances. The Bill before the House today upholds that duty by giving certainty to Northern Ireland finances for the 2018-19 financial year and by enabling Northern Ireland Departments to continue to deliver public services into the first half of 2019-20.

Last year, the UK Government had to step in and ask Parliament to legislate for the 2018-19 budget for Northern Ireland. This was not a step that we wanted to take, but it was a necessary step to give a clear, legal basis to Northern Ireland Departments to enable them to manage resources and perform the important work that they continue to do in the absence of an Executive. I want to put on record once again my admiration for the work that the civil servants in the Northern Ireland civil service do in the absence of political leadership. The legislation that we passed, the Northern Ireland Budget Act 2018, 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 July. Since then, the Northern Ireland civil service has continued to assess where pressures lie across the system, and it has reallocated resources as required. As we approach the end of the financial year, those changes need to be put on to a legal footing, as is a standard part of any annual budgetary process, and that is what this Bill does.

In addition, the Bill will provide for a vote on account for the first half of next year, to give legal authority for managing day-to-day spending in the run-up to the usual main estimates process. This is a normal part of the estimates process. This year, however, following discussions with the Northern Ireland civil service on the pressures it faces in the year ahead, I am proposing in this Bill to provide a higher than normal level of vote on account of 70%.

[Lady Hermon (North Down) (Ind)]

The Secretary of State will be well aware that, in evidence to the Northern Ireland Affairs Committee, a considerable amount of criticism has been expressed of the budget allocation to the Education Department. In particular, we have heard evidence that primary schools have had to ask for donations of toilet roll, in addition to pencils and the other things that one would usually expect. Can the Secretary of State guarantee that, following the increase in the budget to the Department of Education—many other Departments are in the same situation—we will not see a repetition of primary schools in Northern Ireland asking for donations of toilet roll?

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[Karen Bradley]

We are keen that the Northern Ireland civil service does the necessary work to prepare for the transformation of health and education and for the urgently needed reforms but, to be clear, the actual reforms can only be made once Ministers are in place in Stormont to make the decisions and give political direction.

Returning to the vote on account, the reason why it is 70% in this Bill, rather than the normal 45%, is that that recognises the increased spending pressures facing public services and the lack of Ministers in place to take reactive and decisive steps to respond to emerging or escalating pressures. It also recognises the uncertainty of the political situation in Northern Ireland in the months ahead. In the light of that context, such a level of vote on account is reasonable and provides the practical and legal certainties to protect public services in any circumstance and up until the point that Northern Ireland budget legislation for 2019-20 is taken through to secure funding for the full year. It goes without saying that I genuinely hope that a new Executive will be in place to take their own budget legislation forward for 2019-20, but this Government stand ready to take it through if needed.

To be clear, this Bill does not represent a budget for the year ahead. It does not seek to set out in legislation the departmental allocations that I outlined in my written statement on 28 February, because the headline allocations will require legislation later in the year. However, until that point, the vote on account in this Bill and the draft Northern Ireland budgetary position for 2019-20, as set out in my written statement last week, give the necessary clarity and certainty to Northern Ireland Departments to enable them to take decisions and plan and prepare for the year ahead.

[Lady Hermon]

I am grateful to the Secretary of State for allowing me to intervene for a second time. She has said twice in quick succession that the Bill is to allow a budget that takes into account any circumstances in Northern Ireland—that allows Departments to plan ahead. May I just mention Brexit to her? Can she actually tell us how much has been allocated in the Bill towards Brexit preparations and does that allocation take into account—heaven forbid—the possibility of a no-deal Brexit?

[Karen Bradley]

I repeat: the Bill is about putting on a statutory footing the spending that has already taken place. I will be happy to furnish the hon. Lady with information about money that Departments in Northern Ireland have spent on planning for Brexit, which covers all Brexit planning. The allocations in the written ministerial statement do include moneys that have been allocated from the Treasury for planning for Brexit, so that is in the written ministerial statement, but the budget today is about the money that has already been spent. I will be happy to give the hon. Lady full information about money that has been spent to date and up till the end of the month. We are putting that on a statutory footing today. The hon. Lady looks as if she is itching to intervene again.

[Lady Hermon]

I am extremely grateful; it really is very generous of the Secretary of State to give way again. I am reading the legislation before us, which we are asked to give our consent to. Under the allocation for the Department of Justice, it says in black and white —I have not invented this—

“expenditure on activities that are required as a result of the United Kingdom’s exit from the European Union”.

As that appears to be expenditure on activities that are required as a result of Brexit, I have asked the Secretary of State how much has been spent. That is a clear question; I just want a clear answer.

[Karen Bradley]

There may be information on certain departmental spending, but, on the total, this is a number that is owned by NICS, not by the Northern Ireland Office, and I would not want to give the hon. Lady just one bit of the jigsaw. I would like to give her the full picture, including all the money that has been spent on preparations this year. On the allocations for the future, this is to enable the vote on account to happen, but actually the departmental allocations will be properly done, through a budget next year. In the same way as we had a budget Bill last July, which put the 2018-19 spending on a statutory footing, this is the completion of that process for 2018-19. Another Bill will do that for 2019-20. However, I will of course write to the hon. Lady and ensure that she has full information about all the spending across all Departments, because as I say, that information is held by the NICS; it is not owned by the Northern Ireland Office and I want to get it absolutely correct for her.

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[Karen Bradley]

I know the right hon. Gentleman wants to come in, but I want to make some progress, because I am conscious that others want to speak and we want to make sure everyone has a chance to be heard.

Let me go back to the work we are doing today. Like last year, the draft budget sets headline allocations only. It will remain for Northern Ireland permanent secretaries to use the powers of this budget legislation and the draft budget position to take decisions to maintain public services and live within their means. Also like last year, the Bill does not propose any new moneys to be voted on for Northern Ireland. The totals to which it relates are either raised locally or have been subject to previous votes in Parliament, most recently in respect of the Supply and Appropriation (Anticipation and Adjustments) (No. 2) Bill, which has passed through this House and is now in the other House. Instead, the Bill looks back to confirm spending totals for 2018-19, to ensure that the Northern Ireland civil service has a secure legal basis for its spending in the past year. Taken as a whole, it represents the minimum necessary intervention to secure public finances at this juncture.

Let me turn briefly to the Bill’s contents, which largely rehearse what I set out to the House in spring last year when I introduced the Northern Ireland Budget (Anticipation and Adjustments) Act 2018. 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 2019—this month.

Clause 1 authorises the issue of £16.8 billion out of the Consolidated Fund of Northern Ireland. The allocation levels for each Northern Ireland Department and the other bodies in receipt of the funds are set out in schedule 1, which also states the purposes for which the funds are to be used.

Clause 2 authorises the use of resources amounting to some £20 billion in the year ending 31 March 2019 by the Northern Ireland Departments and other bodies listed in subsection (3).

Clause 3 sets revised limits on the accruing resources, including both operating and non-operating accruing resources in the current financial year. All are largely as they appeared in the Northern Ireland Budget Act 2018. The revised totals for Departments appear in schedules 1 and 2.

Clause 4 sets out the power for the Northern Ireland civil service to issue out of the Northern Ireland Consolidated Fund some £11.8 billion in cash for the forthcoming financial year. That is the vote-on-account provision that I have already outlined. It is linked to clause 6, which does the same in terms of resources. The value is set at around 70% 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 70% of the previous year, and clause 5 permits some temporary borrowing powers for cash-management purposes.

As I have already noted, all these sums relate to those that have already been voted for by Parliament, together with revenue generated locally in Northern Ireland. There is no new money in the Bill; there is simply the explicit authority to spend in full the moneys that have already been allocated.

[Lady Hermon]

May I record my serious disappointment that in the allocations we are going to approve today there appears to be absolutely no money at all set aside for the victims of historical institutional abuse? Will the Secretary of State confirm that the head of the Northern Ireland civil service, David Sterling, indicated that the Government would have a moral obligation, after the consultation on the Hart recommendations had ended, to bring the legislation through this House if the Assembly was not sitting? Will the Secretary of State honour that moral obligation to the victims of historical institutional abuse in Northern Ireland?

[Karen Bradley]

The hon. Lady has raised this issue on several occasions and I know how strongly she feels about it. I have met survivors of historical institutional abuse and what they went through is shocking. As she will know, the consultation the Northern Ireland civil service started is still open. Once that consultation has been completed and the recommendations from it are clear, we will consider them in the normal way. To reassure her, the vote on account that we are talking about is merely on 70% of the previous year’s spending. We are not doing anything in this Bill other than giving the Departments in Northern Ireland the ability to continue to spend money up to the level of 70% of the spending in the previous year. We are not directing them on how they spend that money.

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[John Penrose]

A number of Members have said today that they would regard it as a last resort. I agree because we have to be incredibly careful about what we wish for here. We have to be extremely cautious about the notion of starting to take the drug of direct rule because it very swiftly leads to a very difficult and very precarious political position. I say to my right hon. Friend that there is a process laid out in primary legislation passed by this House—the Northern Ireland (Executive Formation and Exercise of Functions) Act 2018—that says we have, first, five months and then, potentially renewable, a further five months in which to find a consensus and get an Executive re-established at Stormont. At that point, to answer his point about “If not now, when?” there are statutory obligations on the Secretary of State for Northern Ireland that will require decisions to be made at those various different waypoints, but it is extremely dangerous and extremely difficult for us all to prejudge, or indeed to wish that those talks, stuttering though they are, but attempted though they definitely are, should not be given enough time to come to a sensible conclusion. I think everybody has been clear that that is what we want them to do; we want them to be successful if they possibly can be.

The SNP spokesman, the hon. Member for Paisley and Renfrewshire North (Gavin Newlands), was of the same mind. He spoke about a paralysing political stalemate in Stormont that must not become the new normal, and I agree.

[Lady Hermon]

I am sure I am not the only one who blinked and drew breath when I heard the Minister use the words “the drug of direct rule.” Perhaps I misheard him, but I will give him the opportunity to pick a more appropriate noun to describe direct rule.

[John Penrose]

It was certainly not my intention to cause the hon. Lady to draw breath. The point I was trying to make is that direct rule is potentially extremely dangerous and can lead to a very difficult political situation if we are not all collectively very careful. It is not a step to be taken lightly, simply or frivolously at all.