Northern Ireland Budget (No. 2) Bill

Richard Thomson Excerpts

2nd reading
Monday 10th July 2023 Commons Chamber

[Richard Thomson (Gordon) (SNP)]

May I begin by expressing my personal disappointment that once again we are here passing measures that should rightly be passed in Stormont? I will add a significant caveat: I had hoped that we might be able to get through today’s proceedings without some of the finger-wagging homilies that we have heard in the past from Members on the Government Benches about the need for Northern Ireland to get its public finances in order, as if the political position in which Northern Ireland finds itself had absolutely nothing to do with the choices of this Government or their predecessors. Some difficult political choices are absent from the measures that we are set to move on with today. The very reason that we are here having to pass them is the political chaos that the choices of this Government and previous Governments have inflicted on the body politic in Northern Ireland over Brexit, and through a Brexit that is still clearly not done.

The first thing to note about the Bill is that, although it might be called a budget Bill, it is quite clearly no budget in any meaningful sense. At any level of government, local or national, a budget is or should be a statement of the political and policy priorities of that government reflected in the allocation of resources. Instead, what we have here is a series of spending limits, absent any kind of reflection of current political priorities or choices that might be made. It is a kind of financial salami-slicing in the shape of the ghosts of ministerial policy decisions past.

In our debates on the Northern Ireland (Interim Arrangements) Act 2023, the right hon. Member for East Antrim (Sammy Wilson)—I hope I am quoting him substantially accurately—said that the return of an Executive would not remove the budget challenges that are currently being faced in Northern Ireland. That much is certainly true, but it is also true that in the absence of clear political choices it becomes much harder to meet those budget challenges through proactive, positive decision making—about cost-saving measures, yes, but also about potential cross-cutting efficiencies and, fundamentally, about what is to be valued and protected above all else when it comes to spending in the public realm.

That heaps the pressure unfairly on public sector management, civil servants and those on the frontline, but, as ever, those who stand to lose out the most are those who are most dependent on the public services facing those cuts: predominantly those who are least well-off and have the least opportunity to influence the political debate in Northern Ireland.

I think it fair to say that the dismay at some of the outcomes of the budget process across Northern Ireland is palpable. The trade union Unite has highlighted that cuts to the Department for Infrastructure threaten not just health, but public safety. The Northern Ireland Construction Group has warned that the cuts will affect every sector, citizen and visitor to Northern Ireland and even put people at risk of serious harm. The charity Children in Northern Ireland has warned that the cuts threaten to push community groups and charities

“to the brink of collapse”.

A joint report by Ulster University, Newcastle University, Queen’s University and Stranmillis University College has warned of an “unremittingly bleak” outlook for young people and education as a result of these measures, warning that they “are disproportionately impacting” the most disadvantaged children and young people in our communities. The report speaks of

“far-reaching and serious consequences of the cuts to the education budget”,

pointing out the disproportionate effect that the cuts have on pupils from disadvantaged backgrounds and stating that

“those children who are most disadvantaged will most acutely feel the pain of this budget laid down by the Secretary of State”.

It concludes that

“the cuts executed will have a devastating impact on those children most vulnerable and furthest from opportunity”.

I am sorry that the right hon. Member for Chipping Barnet (Theresa Villiers) is no longer in her place but, in her intervention on the Secretary of State, she asked how much additional resource currently comes from the UK Government to support policing in Northern Ireland. That figure is £32 million—a figure that I am pleased to say accords exactly with the figure given to me by the Secretary of State in answer to my question on the PSNI at Northern Ireland questions a few weeks ago. However, that £32 million pales into near insignificance in the context of the £141 million budget gap facing the PSNI. The chief constable has said that the budget gap can be met only by further reducing officer numbers, at a time when police officer numbers in the PSNI are at their lowest since 1978 and the PSNI is already some 1,000 officers below the recommended establishment figure from the beginning of the force’s life. Real consequences arise from this situation, not only for public services and the social settlement but for the security that people can expect in their community and, of course, for the broader security situation, which is still rated as severe by the Government’s security agencies.

I could go through any number of budget lines that are affected, but I do not think that would necessarily do us a huge amount of good at this stage, so I will begin to draw my remarks to a conclusion by referring to the September 2020 report published by the Equality Commission for Northern Ireland on the Department of Finance’s preparation for Northern Ireland’s 2019-20 budget. The report set out a number of findings and recommendations on the Department’s failure to comply with its own equality scheme commitments. In doing so, it outlined some key aspects of the Secretary of State’s role in the budget process.

Although the Secretary of State is not a designated public authority for the purposes of section 75 of the Northern Ireland Act 1998, his Department and the Department of Finance are. The report concluded:

“the Budget for Northern Ireland…is a policy and within scope of the Department’s equality scheme arrangements and commitments...

The decision maker on the policy was, on this occasion, the Secretary of State. The Secretary of State was responsible for not only deciding upon the Budget, but also discharging the statutory duties in Section 75 in relation to the Department’s functions, as well as for all the other government departments.”

Although the findings of the Equality Commission for Northern Ireland are clear that the Department of Finance was a focus of its investigations, the Secretary of State was and remains responsible not only for deciding the budget but for discharging the equality duties set out in section 75.

Will the Secretary of State, or the Minister of State, Northern Ireland Office, the hon. Member for Wycombe (Mr Baker), in his summing up, elucidate on what he understands his section 75 duties to be? How can he demonstrate in this process that he has complied with those duties? Does he have any plans, even at this stage, to produce and consult on an equality assessment of the overall budget measures before us today?

I conclude on a measure of agreement, as the Secretary of State, the shadow Secretary of State and I can all agree that the best people to take decisions of this kind are those who have been directly elected to the Northern Ireland Assembly. I well understand the reasons we are here now. I have certainly never been shy about offering my advice to this Government and their predecessors on how they might look to solve some of the self-inflicted difficulties they have created over Brexit. The Government have unaccountably shown a marked reluctance to take up my advice, no matter how well meant, but, given that the Windsor framework has clearly not landed as was hoped, I sincerely urge the Secretary of State and his ministerial team to redouble their efforts to bring about a political environment in which it might be possible to restore Stormont, and therefore restore local political decision making and accountability.

--- Later in debate ---

[Mr Baker]

I say to the hon. Gentleman that the simple fact is that the reason we are not doing all stages today is that summer recess approaches and we would trigger the Parliament Act inadvertently—[Interruption.] My right hon. Friend the Secretary of State does not accept that this is a tactic. The reality is, as we have said, that this is the spending envelope that would have been faced by a returning Executive.

I have to say that, listening to the debate, one would think that the spending envelope in Northern Ireland was at the discretion of my right hon. Friend, but of course, as Members know, nothing could be further from the truth. Long, dreary documents on how spending works are available for the public to read. I am sure that the hon. Member for Hackney South and Shoreditch (Dame Meg Hillier) knows very well the documents to which I refer—I have given them a go. These things are fixed by our right hon. and hon. Friends in the Treasury; it is not at the discretion of me and my right hon. Friend to decide how much is spent. This is the envelope that the Executive would have faced.

The hon. Member for Foyle mentioned the shared island initiative, but that large sum of money was agreed, I believe, through the North South Ministerial Council and comes with a number of caveats. However, he reminds me that there are a number of super-tankers at sea here that have evolved through a number of political agreements. I think that we all need to be working with a restored Executive to rationalise how that spending goes forward. That can be done only with a restored Executive.

A review for the Barnett formula was touched on. My right hon. Friend said earlier that we recognise that introducing a needs-based factor in the application of the Barnett formula for Northern Ireland according to a mechanism similar to that implemented in Wales is an option that could be considered to put Northern Ireland’s public finances on a sustainable footing. However, it took a number of years for the Welsh Government and the Treasury to agree a formula, and my hon. Friend the Member for Aberconwy (Robin Millar) wisely cautioned us that that matter is not settled. He also cautioned us about the dominance of the public sector. That is why I am so firm that Northern Ireland must be founded on a revitalisation of its vibrant private sector.

Let me turn to the funding premium and the comparison between the percentage of funding for Northern Ireland and the equivalent spending for the rest of the UK. Let me be really clear because, in listening to the debate, one could misunderstand the position. Funding for Northern Ireland will increase from 20% to 25% extra in 2024-25. Insofar as that funding premium is forecast to fall below 20%, it is by the early 2030s but not immediately.

I am grateful to the hon. Member for Hove (Peter Kyle) for mentioning revenue-raising measures. We will have full advice by the end of this month. He referred to the remarks made by the permanent secretary at the Department of Education. We are very well aware that, to live with its budget, the Department of Education has already taken significant steps to reduce expenditure. I am aware that, despite that, there is a funding gap. Our Department continues to engage with the Department of Education and the Department of Finance to address that. A previous political agreement such as NDNA recognised the structural inefficiencies in Northern Ireland’s educational system, about which Members may perhaps see that I feel passionately, and recommended a review to address them with reform. I welcome the recent completion of the review into special educational needs provision, and I look forward to the outcome of the review of education provision for 14 to 19-year-olds.

There has been a great deal of interest in the particular details of per-pupil funding. I propose to write to my hon. Friend the Member for Worcester (Mr Walker) in detail on education funding. I shall place a copy of that letter in the Library for all Members who have expressed an interest.

The hon. Member for Gordon (Richard Thomson) in particular raised section 75 duties and whether they are carried out by us and so on. As the ones taking the decisions, Northern Ireland Departments completed indicative section 75 assessments that were considered by the Secretary of State when he set the overall budget allocations. In light of those budget totals, Departments are now completing final assessments.

[Richard Thomson]

I am grateful for that clarification, but however good the intentions are, it seems to fall short of full compliance with what is expected under the section 75 procedure. Could those indicative assessments be put in the public domain, so that we can start to foster that wider political debate about the budget choices that are now being made?

[Mr Baker]

At the risk of sounding like a stuck record, the best way to get those questions answered is to get the Executive back and the Executive making these decisions—

[Richard Thomson]

And in its absence?

[Mr Baker]

That brings me on to a point I wanted to make. My right hon. Friend the Secretary of State and I sat here throughout the debate listening to a number of Members imploring us to take one action or another, which would amount to going down the road toward direct rule. We have no plans to go toward direct rule. We have been asked what we will do if this situation continues. In the event that we need to take further steps, we will announce them, if the need arises and when the time is right, but we have no plans to go to direct rule, and no amount of pressing us on one issue or another will cause us to take up direct rule.

Regarding the Windsor framework, yes, there are some technical matters that we might deal with in order to fulfil the policy intent clearly agreed by both sides. Where there are technical issues we need to move forward on, please, let us take them up as technical issues and deal with them in the Joint Committee. Let us not again raise such matters up to levels that require the attention of the great statesmen and women of Europe. It is better to deal with these things in a low-key way.