Northern Ireland Budget (No. 2) Bill

Robin Millar Excerpts

2nd reading
Monday 10th July 2023 Commons Chamber

[Robin Millar (Aberconwy) (Con)]

Members will be aware of my keen interest in all things the Union. In truth, I had intended not to speak but to come, listen and learn from colleagues from across the House who in many ways are much more closely attached to these issues than me.

I will start, as my right hon. Friend the Secretary of State did, by thanking all those concerned for the amount of time and effort they have put into resolving these issues. They are tricky issues that have vexed minds finer than my own for many years in many different ways. In particular, in recent months I have noticed how much effort the Government have put into trying to resolve things. The Secretary of State has taken a very close personal interest in these matters, as has the Prime Minister through the efforts on the Windsor framework. I recognise and acknowledge that, as well as the involvement and effort of Opposition Members in the negotiations and ongoing discussions.

I want to tiptoe carefully into this debate by asking some questions around the context, in particular picking up on a couple of comments the Secretary of State made from the Dispatch Box. On the introduction of the Barnett formula to the discussion, while I understand the potential attraction of that kind of settlement, from a Welsh perspective I urge caution. I would not by any means describe the Barnett formula as a settled matter in Wales. I would urge caution about a move to a needs-based formula. In Wales, we have an economy—I say that word almost in quotation marks—that is largely public sector dominated. It is not a functioning economy in the way that we might think is vital, with the role of the private sector in driving, growing and sustaining the wider community, so the provisions are questionable.

The first point I want to speak to relates to institutions. The Secretary of State mentioned good governance and, several times, made points about the democratically elected representatives in Northern Ireland. That is really important, because we have elected Members in Northern Ireland, both in this place and in Stormont. As I understand it—I am happy to be corrected by any Member here—those Members have acted within the rules of that institution. The fact that Stormont is not sitting is a technique that has been used by others in previous years. It is not new; it is not original. It is a function of the arrangements we have in place.

[Colum Eastwood (Foyle) (SDLP)]

My grandmother once told me that two wrongs do not make a right. Is the hon. Gentleman making the argument that just because Sinn Féin brought the Executive down for three and a half years, it is okay for the Democratic Unionist party to do the same?

[Robin Millar]

I am not sure how the hon. Gentleman got there from what I said, but that is not where I am going. That is absolutely not where I am going. I simply made the observation that they had done it and that others were doing it, and that validated the existence of a mechanism in place which people have used. That is all I said.

The point I would make, though, is that if there is a democratically elected body and the mechanisms within that institution are being used, how is that not upholding the institution in place? If that is the case—the function of the institution and the rules that underpin it are being upheld—what is the good governance that the Secretary of State is seeking? Is he seeking something else? Is he seeking something outside the rules that are in place to uphold that institution?

[Sir Jeffrey M. Donaldson]

I thank the hon. Member and my friend for giving way, and for his interest in the Union. He is making a very important point. For some, it is convenient at times to talk up the need for cross-community consensus and to talk about the rules. It is less convenient for them at other times, when the rules are followed and people play by the rules. When things happen that undermine that cross-community consensus, then unfortunately the rules mean that our institutions do not work to the extent that we would like them to. Therefore, rather than howling at the moon, is it not better that we fix the problem and restore the consensus?

[Robin Millar]

I thank the right hon. Gentleman for his intervention. That is where I am heading with my next point.

As I said, I tiptoed into this. I am very conscious that others are much closer to these issues than myself. I offer my comments because I think, from the little I understand, these are important points of context for what is happening and what we are seeing.

Finally, the Secretary of State has made the astute point that money alone cannot solve this. I think it was the hon. Member for Strangford (Jim Shannon) who said that some extra £7 billion has been put into Northern Ireland. Somewhere along the line, the United Kingdom has moved from an understanding of a covenant among the different parts to one of a contract; we have become very transactional in our understanding of things. I would just make the observation that that does not fix things. It does not fix the relationship.

At the heart of the issue, as I understand it—the Minister may comment on this point in his summing up, if he sees fit—is a relationship and a covenant, not a contract. It is about identity and a place within the Union, as expressed through trading relationships. We have been brought to a point at which Stormont has not been sitting, which is why we have this item of business before us today. I will not keep the House any longer; I thank hon. Members for their forbearance in listening to my questions.

--- Later in debate ---

[Sammy Wilson]

I know that the Secretary of State was not personally responsible, but he cannot wash his hands of the New Decade, New Approach agreement, which was between the parties in Northern Ireland and the then Secretary of State, the right hon. Member for Skipton and Ripon (Julian Smith). The Executive did not pull this out of the air and say, “We’re going to do this”; it was part of the agreement that was made. Indeed, I have heard Ministers in this place saying time and again, “You’ve got to get back to the New Decade, New Approach promises and the commitments that were made,” yet this is one of those very commitments, and it is one that will not be met because the money is not there.

The argument that we have heard tonight is: “Well, that’s partly the responsibility of the Executive. If the Executive were up and running, then you could spend the money better.” I have no difficulty with that. Only a fool would say there were no savings to be made in a resource budget of £14 billion, or that it could not be spent better. Anybody who looks at their own personal budget will find ways of saving money and allocating it better to meet their priorities, so of course the potential is there. Indeed, I know from my time in the Executive that we were able to find 3% savings across Departments, and I am not against what the Minister said—that there are ways we could spend money better.

We have dodged reforms over the years because some of them require difficult decisions. That is the responsibility of the Executive, if they were up and running. I could bore the House with lots of examples, but in the past our Ministers have shown how we have used money in order to use resources better. Indeed, we have even looked at co-operation with the Republic of Ireland, when it has come to spending money, and at how we could share resources to deal with those kinds of issues and make better use of money.

Our party believes in low taxation and the proper use of the public resources we have, so we are not going to ignore that. But the fact of the matter is that the Executive are not up and running. Even if they were up and running, the issues and the problems of public spending in Northern Ireland are so big that the Executive would struggle to make some of the necessary reforms. Do not forget some of those reforms require money to be spent to make the reforms, so there is a vicious circle.

The Budget is inadequate—that is the first thing we need to look at. The holes in the Budget are so big and the issues around it so difficult that even if we had a performing Executive tomorrow, they would not be able to get past those issues. The building of public sector housing has fallen by 25% because of capital costs.

There are also difficulties, when it comes to the Executive, of pure caution. I know the Minister will talk about how much money has been given to Northern Ireland, but do not forget that we have given back £471 million in financial transactions capital, because the rules tied around that required a degree of innovation by civil servants and the Northern Ireland Office that was not always possible. The main outlet for it was housing, and there is only so much that it could absorb. So when it comes to taking money off the Executive, let us not forget that where money could not be spent, it was returned to the Exchequer. Sometimes it was frustrating to find that money had been given that could not be spent because we were not being innovative enough.

That brings me to the second issue. I know the Minister will say how much money is given to Northern Ireland and how some constituents in the south of England would envy the amount of money that comes to Northern Ireland, but there is a mechanism for allocating money within the United Kingdom. At present, the Barnett mechanism works by simply giving Northern Ireland a percentage—3%. If there are Barnett consequentials for Government spending for the whole of the United Kingdom, we get 3%.

However, it was always recognised that across the United Kingdom the circumstances are different. It was first raised in Wales and, as has been pointed out, there is a greater need in some parts of the United Kingdom, because of a whole lot of factors that I will go into in a minute, and therefore the 3% given on a per head basis is not adequate. It needs to be topped up on a well-established needs basis. Because of needs in Northern Ireland, it was reckoned that for every £100 spent in England, £125 would need to be spent in Northern Ireland. In other words, it was a 25% uplift.

For example, if the Barnett formula showed that Northern Ireland should get 3%, on the basis that Northern Ireland has 3% of the UK population, then there should be a 25% addition—a 0.75% addition to the 3%—to that. That has not been happening. The Northern Ireland Fiscal Council has worked out that had that additional needs element been put in this year, then we would have had another £323 million. Incidentally, that would have plugged the gap in public spending.

If that were happening right across the United Kingdom and people were saying that they were not applying it in Scotland or Wales, then, I suppose, those in Northern Ireland would have no cause for complaint. The truth of the matter is that it is being applied in every other part of the United Kingdom, apart from in Northern Ireland. This is the only budget that is being brought forward where the need is recognised but not reflected in the moneys allocated.

The Secretary of State has argued that if the Assembly were up and running, we could make the case, but we do not need to make the case; it has already been agreed that the formula for Northern Ireland should be another £25 on top of every £100 spent in England. We do not need to fight over the definition of need, because it has already been established. The Holtham Commission made that quite clear. I take the point that was made earlier: I do not want Northern Ireland to become some sort of public sector-dominated economy, which makes us totally reliant. I want to see Northern Ireland becoming self-reliant. I want to see a growing economy; an economy that is generating taxes, income and revenue, and that does not need to be reliant on having a fight with the Treasury every year about the budget and whether we are getting the proper Barnett consequentials.

The definition of need is already well established. It is based on demographic figures—the number of people—and deprivation and cost measures, such as the under-16 dependency ratio, the retired persons dependency ratio, the percentage of population claiming income-related benefits, the percentage of population with long-term illness, the proportion of people outside settlements of 10,000 people, and so on and so forth. We do not need to fight about how much Northern Ireland is entitled to. We do not need to fight about the measure that determines that need. All we need is a decision that the need should be reflected in the budget allocation in Northern Ireland, just as it is in Scotland and Wales.

The Secretary of State argues that, if the Executive were up and running, we could make those arguments, but the arguments are made. The question is how long do we have to wait for what happens in other parts of the United Kingdom to be applied to Northern Ireland.

[Robin Millar]

I do not want to interrupt the right hon. Gentleman’s flow, because I am fascinated by his argument. The point I made was that in Wales, for example, it is £1.20 for every £1 spent in England. However, as much as we are told by the Welsh Government that there is an older and sicker population in Wales, it does not account for the fact that, in terms of education, we have tumbled down the Pisa ratings. The point that I was making was that it is not just about the quantum. Has the right hon. Gentleman any suggestions as to how that money might be spent more effectively in order to achieve the better outcomes?

[Sammy Wilson]

I think the point that I made was an indication of that. It is not just about getting money so that we can spend it willy-nilly and not care about how it is spent. It must be spent in the best way possible. If we take education in Northern Ireland, for example, we have five different sectors, and in some cases a surplus of desks and, therefore, unnecessary schools that could be closed, amalgamated or whatever. The irony of this—this is where I take issue with some of the decisions by the Northern Ireland Executive—is that one of the last acts that the Assembly undertook was that, despite the surplus of places in existing schools in Northern Ireland, special provision had to be given to opening new schools that had “Integrated” above the door. This was despite the fact that there are stacks of schools that do not have “Integrated” above the door, but that are more integrated than some integrated schools. That will result in additional pressures on the education budget. I am not so sure that some of the decisions made by the Executive on how the money is spent are always the best.

There is one in the area of education and in the area of health as well. I know I am going to incur the ire of some of my own colleagues, and maybe some other hon. Members, by saying this, but in Belfast we have four major hospitals. Four major hospitals for a city of—what? Some 300,000 people? Are there really not better ways of spending that money to ensure proper health provision? Yet we spend it—[Interruption.] And that is exactly the debate that has to be had.

--- Later in debate ---

[Carla Lockhart (Upper Bann) (DUP)]

It is deeply regrettable that we find ourselves in this situation once again. Sometimes, the Democratic Unionist party gets accused of not wanting to be in the Stormont and the Executive. To be clear to all Members across the House, we are a party of devolution and we want devolution restored in Northern Ireland. We want to take the decisions in the Stormont because budget decisions are best taken there. We know that, while our electorate want us to be back in the Stormont taking those decisions, they also clearly want us to ensure that cross-community consent is restored in that Assembly. That was the message on the doorsteps during the local government election. Although some will want to ignore that view, we will not.

Time is a precious commodity. Wasting time is not something I would indulge in—anyone who knows me will know that. There has been a criminal waste of time resolving issues with the protocol and the Windsor framework. Those issues could be quickly and easily resolved by the Government. Drift is not acceptable anymore. There was no drift when abortion laws were forced on the people of Northern Ireland. There was no drift just a few weeks ago when legislation on relationships and sexual education was forced on the people of Northern Ireland. There was no drift when Sinn Féin demands on Irish language legislation were introduced. When there is will from the Government to do something, they do it very quickly.

On a daily basis, economic harm is being caused to the people of Northern Ireland, with the continued placing of a border in the Irish sea resulting in Northern Ireland’s place in the UK being continually undermined. Businesses and industries are being impacted and competitiveness is being undermined, yet there is continued drift on the part of the Government. There is no urgency. Often, there is not even a recognition of the problems caused to businesses by the Windsor framework and the protocol. We hear much from colleagues about the idea that the Windsor framework has resolved all the issues.

I challenge all Members to speak not to the trade bodies, but to the businesses that are being impacted. Speak to the manufacturing industry, speak to the agriculture industry and speak to the horticulturalists in Northern Ireland who are still experiencing massive problems with the implementation of the protocol and, subsequently, the Windsor framework. What I want to see, on the back of this budget debate, is a change in attitude to addressing the most fundamental issues that are impacting Northern Ireland and keeping our Executive down.

Turning to the Bill, my first point is more general and has been made today several times. We welcome the Government’s commitment to look at this issue, but my hon. Friend the Member for Belfast East (Gavin Robinson) has been to the fore and most effective in pressing for a review of the Barnett formula. I believe that debate is gaining traction—it is becoming abundantly clear at our weekly Northern Ireland Affairs Committee meetings. I welcome the Secretary of State’s intervention today, but in truth we are again placing a sticking plaster over the financial needs of Northern Ireland, unlike our Welsh counterparts who enjoy a needs-based financial allocation. We can see clearly that this budget is about short-term financial decisions and is not based on the needs of the people of Northern Ireland, including the needs of the people in my constituency of Upper Bann. We want a restored Executive.

[Robin Millar]

The hon. Lady used the phrase “enjoying a needs-based allocation”. I would contest that. My concern is the risk that we end up in a spiral, with a kind of Top Trumps of deprivation. Who is the most deprived? They get the biggest sum. Does she not agree that there is a risk to attaching a purely needs-based assessment to allocations?

[Carla Lockhart]

The reality is that the Barnett formula across the United Kingdom, in all the different nations, is needs-based. It is important that we do not just give Northern Ireland an amount of money, but drill down to the actual needs. On whether that means tinkering around with what has worked and what has not worked in Wales, we are more than willing to enter into those conversations, and use the Welsh model as a baseline and improve on it. Hopefully, if we can make improvements in Northern Ireland, they can be transported to Wales as well.