Northern Ireland Finances

Owen Smith Excerpts

Monday 12th March 2018 Commons Chamber

[Owen Smith (Pontypridd) (Lab)]

May I begin by wishing the Secretary of State a very happy birthday for today? I thank her for advance sight of her statement. Of course, we saw most of it last week when the Government effectively published the budget for Northern Ireland in a written statement that came out at 5 o’clock on a Thursday evening, and I have to say that I think that is an unsatisfactory state of affairs; it is a bit discourteous to this House and, more importantly, the people of Northern Ireland to announce what is a £10.5 billion budget affecting key services for 1.8 million citizens in such a manner, with no opportunity for this House to question, challenge or, certainly, to amend those allocations, and in the absence of any accountable devolved Government in Northern Ireland. I am sure the Secretary of State would not think that was a suitable way to set a budget for her constituents in Staffordshire or mine in Pontypridd, and I hope she will explain to the House why the Government felt they needed to do it in that fashion.

Dare I suggest, Mr Speaker, that the real reason for this slightly stealthy announcement is that the Government are a bit embarrassed that just days before the Conservative party is going to vote through the latest rounds of cuts for public services affecting citizens in England, Wales and Scotland, the £1 billion partnership with the Democratic Unionist party means that Northern Ireland alone is being spared? We absolutely welcome that investment in Northern Ireland, but we also need to see investment in health and education and other key public services in every part of the UK, not just the bit where the Tories need DUP votes.

Turning to the substance of the budget, the Secretary of State said last week and repeated a moment ago that, in the absence of an Assembly and with decisions being taken by wholly unaccountable permanent secretaries, some fundamental decisions cannot be addressed. We agree, but it seems to me that some pretty fundamental decisions were taken last week by the Secretary of State, and I wonder whether she might answer some questions about them today.

First, on the decision to put up taxes in Northern Ireland through the regional rate, can the Secretary of State confirm whether that was discussed in detail and agreed with any or all of the parties in Northern Ireland? Secondly, in respect of the decision to significantly increase the budgets for some individual Departments, can she explain to the House the reasons for an increase for the Department of Justice of £36 million, or 70%, on last year, an increase for the Department of Agriculture, Environment and Rural Affairs of £40 million, or 110%, on last year’s budget, or the increase for the Department for Communities of £38 million, or 30%, on last year? I am sure that there are good reasons for all those increases and for the significant cuts that are made to some of the administrative Departments elsewhere, but the House and the people of Northern Ireland deserve some explanation why the decisions were made and by whom.

As I said, I welcome the extra resources for Northern Ireland, including the extra £80 million for health and education and the extra £100 million to transform the health service in line with the Bengoa report, but will the Secretary of State spell out how that £80 million on health and education will be divided? Who will make the decision about the appropriate allocation? Is that something that the DUP co-ordination committee will be discussing with the Conservative Government, or has it already been discussed?

The Secretary of State talks about big health reforms, and she will be aware that some of the reforms mentioned in Bengoa and other health plans related to hospital closures and other changes to the configuration of health services. Does she imagine that such big decisions could be taken by civil servants? If not, what exactly is the £100 million to be spent on?

The gravity of the issues at hand and the scale of the decisions being taken merely serve to underline the grave crisis that we face in Northern Ireland 14 months after the Executive collapsed and power sharing ended. I welcome the Secretary of State reiterating her commitment to the Belfast agreement and the principles of consent and power sharing that underpin it, especially in the light of recent attempts by some to undermine the agreement. However, we need more than more tireless activity; we need to see some success in the forthcoming negotiations if we are to get to next month’s 20th anniversary with a real sense of optimism about the future of the agreement and of power sharing.

The Secretary of State was at pains to point out that she does not anticipate any failure in the negotiations, but the House and the country will have been struck by the acknowledgement that she thinks that she may need to consider alternative means of keeping the agreement and political accountability alive in the absence of an Executive. That raises important questions about feasibility, given that some parties will not want to take part in a shadow or other form of Assembly, and about the form of any alternative. It also raises a significant risk, of which I hope she will take particular note. Moving to an alternative form of Assembly would take pressure off the parties to come to an agreement that allows them to re-engage in meaningful power sharing. Does she acknowledge that risk in any shift away from the agreement?

Finally, I urge the Secretary of State to ensure that this is the last time we push through a budget using this unsatisfactory process and the last time that a budget is set by this House and not Stormont, where it ought to be set.

[Karen Bradley]

I thank the hon. Gentleman for his kind words about my birthday. I was not expecting to spend it making a budget statement, but there we go. I join him by saying that I hope that this is the last time that I have to stand at the Dispatch Box having taken such action, because we all agree that such decisions should be taken by locally elected politicians. The people who elected their politicians in Northern Ireland want them to take such decisions. I genuinely believe that those politicians want to take those decisions. There are, as he knows and as we have discussed previously, some issues on which the parties cannot agree, but I believe that we can get to a point at which a devolved Government can get up and running. That is what I am determined to achieve. Everything that I have done and set out today is in line with that aim. I want to see a devolved Government back in Stormont. The decisions that have been taken, while difficult, are those that needed to be taken for the public services, but I have taken them in the light of the fact that I do not want to undermine the constitutional arrangements and devolution settlement in Northern Ireland.

As for timing, the hon. Gentleman will recall that I committed to lay a budget by last week when I appeared in front of the Northern Ireland Affairs Committee the week before last. That is why it was important to get the written statement out last week, and I am here at the earliest opportunity to explain things to the House and to take questions from right hon. and hon. Members. However, it is important to put it on the record that I did not publish the statement until I had had the chance to show it to all the main parties represented at Stormont and until they had had the opportunity to see the allocations. My fervent hope is that they will actually deliver the budget, which is why it is important that they were all consulted on the work that had been done.

I pay tribute to my officials and the civil servants of the Northern Ireland civil service. They have worked incredibly hard and selflessly to help to deliver the budget in a way that is uncomfortable for many. They want political direction from politicians, and it is difficult for them to do without it. They have gone above and beyond anything that we would expect of civil servants.

As for the decisions on the allocations, I looked at the key Departments. The hon. Gentleman asks about Justice, and I wanted to ensure that there was money to protect the policing budget, which he will recognise is very important. He asked about the £100 million from the confidence and supply arrangement for health transformation. That was money that the Government recognised and agreed needed to be spent in Northern Ireland because of its unique circumstances. I actually visited the hospital in Derry/Londonderry only last Monday and met consultants and managers, and it was clear to me that health transformation is a priority and that we need to ensure that the money is spent. I have taken legal advice to ensure that the money goes towards the priorities on which it is designed to be spent.

The hon. Gentleman asks about the alternative approaches, and he will know that many have suggested ways to arrange some form of functioning Assembly or scrutiny at Stormont. I am considering all the suggestions, a number of which have been made by the parties, and I would welcome further suggestions. I am taking legal advice on them all, because I do not want to do anything that undermines what we have achieved in the 20 years since the Belfast agreement. However, if there is a way of getting ourselves back on the road to a functioning devolved Government in Stormont, with scrutiny being applied by locally elected politicians, we should endeavour to try to find that route.

--- Later in debate ---

[Karen Bradley]

I know the right hon. Gentleman served as a direct rule Minister, in 2004-05 or around then. He was distinguished in doing so—

[Owen Smith]

It was 2005-06.

[Karen Bradley]

I am being corrected by the Opposition Front Bencher.