Northern Ireland Budget (No. 2) Bill

Lord Murphy of Torfaen Excerpts

2nd reading & Committee negatived & 3rd reading
Thursday 14th September 2023 Lords Chamber

[Lord Murphy of Torfaen (Lab)]

My Lords, it has been said by nearly everybody who has taken part in this debate that we should not be having it and that this should be decided by the representatives of the people of Northern Ireland at Stormont. But we are where we are, so we clearly need to support the Government so that Northern Ireland can have some money. Without the Bill, its public services will not function. The debate today—this is a money Bill, so ultimately this is a matter for the Commons—is about whether in fact there is sufficient money and whether things would be different if there were a restored Executive.

On the first part, it is not as simple as saying that Northern Ireland is the same as everywhere else in the UK. It obviously and clearly is not. I was looking at English counties and which ones might be comparable to Northern Ireland in geography and population. One that I looked at was Hampshire, which has a population of just under 2 million people—the same as Northern Ireland. Hampshire County Council has doubtless grumbled and complained over the last number of years about the level of rate support grant that it gets from the Government, in the same way that Northern Ireland would complain that there simply has not been sufficient public funding for public services in the whole of the United Kingdom. There is a difference, however, between Hampshire and Northern Ireland. A lot of my time in the two years that was the Finance Minister for Northern Ireland was spent persuading my Treasury colleagues in particular that there was a difference, and that they had to make sure that the part of our country that had come out of 30 years of conflict was treated differently financially from anywhere else. Although it is a quarter of a century since the Good Friday agreement, the impact of those 30 years remains.

The other issue is that the basis for getting income in Northern Ireland is very different from Hampshire, in that Hampshire is much more prosperous than Northern Ireland. The level of resourcing—if you look at the different sorts of local taxation—does not actually bring in an awful lot of money in Northern Ireland. When we were discussing the strand 1 negotiations before the Good Friday agreement, I remember that we came to a day devoted to finance for Northern Ireland. We spent one hour on it, on the basis that there simply was not sufficient money for a special income tax, for example, to come from the people and the businesses of Northern Ireland. However, I am sure that that does not mean that we cannot look—or that the Assembly could not look in later years—at issues like water rates, which are paid everywhere else in the United Kingdom but not in Northern Ireland, although it will be argued that, in Northern Ireland, the rates form part of that. There are possibilities, but that is not the answer.

What is certain is that there is the combination of difficult financial circumstances in Northern Ireland and the fact that there is no Government. There is a county council in Hampshire which is elected and has to take the decisions; nothing is elected in Northern Ireland to take those sorts of decisions. They are not even really taken by direct rule Ministers. Although we are producing a budget here, we are not saying how to spend that budget. So, what do the Government do? We agreed with the Government on allowing civil servants to take decisions on budgets, but how far can they go? They cannot take decisions on policy, they cannot take decisions on programmes and they cannot take decisions on spending commitments. In other words, all they can do is oversee the ticking over of the budgets in departments.

That combination, where no meaningful decisions can be made on those issues, means that nearly every department in Northern Ireland is paralysed in terms of its spending. I will not go through it, because Members of your Lordships’ House have gone through, in detail, the effect on the health service, the education services, the police—particularly the result of the leak—and the criminal justice system and so on. They are all in serious trouble, because of not just a lack of funding but a lack of decision-making.

That combination is lethal, so how do we overcome it? There is one obvious way, but there are others too. The Treasury itself should be made to realise that Northern Ireland is different. The Treasury is not known for backing a long-term strategy and long-term issues. It is a very short-termist department—it always has been and I suspect always will be. It is therefore up to the Prime Minister and the other members of the Cabinet to persuade the Treasury that things are different in Northern Ireland.

That also applies to the point made by several speakers, including very effectively by the noble Lord, Lord Morrow, with regard to the Barnett formula. Yes, that formula was introduced by a Member of this House many years ago, but he disowned it eventually and indicated that an element of need had to be taken into account when exercising formulae for spending in Scotland, Wales and Northern Ireland. As has rightly been said, the Welsh Government looked very carefully at the issue with the Holtham commission and came up with a formula which means that the amount of money now going to Wales is based on proper need. I cannot see for one second why the Government cannot look at that formula in relation to Northern Ireland. Northern Ireland is obviously in great need, and those people who are most deprived in Northern Ireland are suffering most because of the absence of an Assembly and the absence of adequate funding.

The other perhaps small issue that could be looked at is that, apparently, every month in Northern Ireland the government departments issue communiqués about what they have done. It might be useful if they issued communiqués about what they cannot do: “We can’t do this, because there is no Assembly” or “We can’t do that, because there are no Ministers”. That might indicate how significant this is.

My final point is that this can be resolved only when you have a democratic system running government in Northern Ireland. We need the restoration of the Assembly and the Executive and the restoration of strand two on north-south issues—all those must be resolved ultimately and soon—for the issue of finance to be resolved. It is a huge issue. I am hoping that, in the next few months, the Minister can come to the Dispatch Box and tell us what is exactly is happening with those negotiations and that soon there will be a restored Assembly and Executive for all of the people of Northern Ireland.