Northern Ireland Budget Bill

Lord Coaker Excerpts

2nd reading: House of Commons & 3rd reading: House of Commons & Report stage: House of Commons
Monday 13th November 2017 Commons Chamber

[James Brokenshire]

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.

[Vernon Coaker (Gedling) (Lab)]

I just seek to understand the figures that the Secretary of State has given out, and this relates to the question raised by the hon. Member for Upper Bann (David Simpson). Our understanding is that we can be talking only about 95%. Does that amount to a £600 million reduction in spending ability for the Departments in Northern Ireland? Who will decide which Departments face the reductions to make that £600 million reduction?

[James Brokenshire]

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.

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[Vernon Coaker]

rose—

[James Brokenshire]

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

[Vernon Coaker]

I think there is probably only one person in the House who properly understood all of that, and I will not say who it was. I thank the Secretary of State for his answer. What the people of Northern Ireland and Members of this House want to know is, if we strip out all the technicalities the Secretary of State has outlined, what is he actually saying? Is there a cash freeze? Is there a real-terms reduction? We read in the press that health spending is to rise and education spending is flat. We heard the hon. Member for Upper Bann (David Simpson) mention the £600 million figure, which has been raised on several occasions. If we strip away all the technicalities, what is the Secretary of State actually saying about the spending power for each Department up until 31 March next year?

[James Brokenshire]

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.

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[Dr Murrison]

My right hon. Friend, who served in a distinguished way in the Northern Ireland Office, knows that full well. Decisions have to be made by Ministers, and my question is about the elements of the report, which I have highlighted simply as an exemplar, that would require ministerial direction, and the extent to which supplementary estimates might be introduced. Notwithstanding the welcome announcement of funding that my right hon. Friend the Secretary of State made today, to what extent can those estimates be laid before the House to achieve the purposes I described? I ask that with a certain trepidation, because I would counsel against the constant tabling of supplementary estimates, which would have the effect of introducing direct rule in dribs and drabs. If we need to look to direct rule, notwithstanding the risks, that must be clear, and not done by stealth and gradually, which would be a recipe for confusion.

[Vernon Coaker]

The hon. Gentleman has made interesting comments about direct rule and some of its dangers. Does he see a role for the Select Committee in considering how devolution could be restored, or how initiatives might be developed, perhaps along the lines that my hon. Friend the Member for Pontypridd (Owen Smith) mentioned, as well as others, to try to support the restoration of the Assembly and the Executive? Has the Committee given any thought to that, or to scrutinising how the budget process works if the Executive are not restored?

[Dr Murrison]

I am grateful to the hon. Gentleman, who is right on two counts. First, my Committee is mindful of its responsibility at this difficult time to scrutinise. Although constitutionally our position is to scrutinise the Northern Ireland Office’s work, we feel it incumbent upon us to be part of the process of scrutiny in a way that perhaps did not previously apply.

I know that investigating possible future models exercises the minds of members of my Committee, and the hon. Gentleman may think that we would like to work further on that. I do not want to pre-empt the Committee’s determinations, but when we have completed our current inquiry into the land border and Brexit, we would perhaps wish to consider and contribute to the debate on those possible models. I am grateful to the hon. Gentleman for his tacit endorsement of such a position.

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[Chloe Smith]

We have spent significant time on the future of devolution and what the next steps should be. That might have happened during our consideration of a technical budget Bill, but the House has discussed those matters tonight. The Government will continue to support the Northern Ireland political parties, working with the Irish Government as well, so that we move towards resolving the differences that have stopped an agreement from being reached. We are steadfast in that and in our commitment to the Belfast agreement. We will work tirelessly on that process from tomorrow morning.

[Vernon Coaker]

The debate has been good; there is general good will across the House towards Northern Ireland. The House will rightly support the budget proposals, but there is an impasse at the moment. No matter whose fault that is, a number of us want the Government to take concrete steps to support the restoration of the Executive and the Assembly. This is about not just rhetoric or wishful thinking, but concrete steps that will give us a chance of believing that the matter can be resolved.

[Chloe Smith]

I am grateful for that intervention. Several options remain under close consideration. My right hon. Friend the Secretary of State will continue his work with the kind of patience for which he has been roundly praised in the Chamber. Such work must continue. The Prime Minister will continue to give the process her wholehearted support and active attention. I will not go into further detail on the avenue down which the hon. Gentleman is trying to draw me, because our consideration of the Bill is not the appropriate vehicle for that. [Interruption.] Instead, we must pass this budget Bill and, with your support, Madam Deputy Speaker, I will conclude my remarks to allow us to do that.

The Bill is a necessary intervention in devolved matters, but it does not preclude the continuation of the talks. Indeed, it leaves spending decisions in the devolved space for a returning Executive to take, should the parties reach an agreement, which is what we all wish them to do. While leaving the decisions at a devolved level, the Bill none the less gives Northern Ireland Departments and other public bodies reassurance about their funding for the rest of the financial year. The people of Northern Ireland need that for their public services, and, as such, I propose that the Bill is read a Second time.

Question put and agreed to.

Bill accordingly read a Second time; to stand committed to a Committee of the whole House (Order, this day).

Bill considered in Committee (Order, this day).

[Dame Rosie Winterton in the Chair]

Clauses 1 to 8 ordered to stand part of the Bill.

Schedules 1 and 2 agreed to.

The Deputy Speaker resumed the Chair.

Bill reported, without amendment.

Bill read the Third time and passed.