Northern Ireland Budget (Anticipation and Adjustments) (No. 2) Bill

Sammy Wilson Excerpts

2nd reading: House of Commons
Tuesday 5th March 2019 Commons Chamber

[Karen Bradley]

I understand the hon. Gentleman’s concerns, but we have to be aware of the constitutional precedents that are set by changing the way we scrutinise these Bills. The way this Bill should be taken through is not as primary legislation; it should be an estimates process done in Stormont, in the same way as we vote on our Budget in this House. We do not have scrutiny of the Budget resolutions upstairs; we have a Finance Bill that puts them into legislation, but we vote on Ways and Means resolutions on the Floor of the House. Unfortunately, we do not have the ability to do that in Stormont, for well documented reasons. What I want is to see those politicians in Northern Ireland doing the right thing, coming back to Stormont and forming the Executive, so that all those proper processes can be applied. We should not kid ourselves that some substitute arrangement will offer a different approach; we have to see devolved government restored in Stormont.

[Sammy Wilson (East Antrim) (DUP)]

rose—

[Karen Bradley]

I know the right hon. Gentleman wants to come in, but I want to make some progress, because I am conscious that others want to speak and we want to make sure everyone has a chance to be heard.

Let me go back to the work we are doing today. Like last year, the draft budget sets headline allocations only. It will remain for Northern Ireland permanent secretaries to use the powers of this budget legislation and the draft budget position to take decisions to maintain public services and live within their means. Also like last year, the Bill does not propose any new moneys to be voted on for Northern Ireland. The totals to which it relates are either raised locally or have been subject to previous votes in Parliament, most recently in respect of the Supply and Appropriation (Anticipation and Adjustments) (No. 2) Bill, which has passed through this House and is now in the other House. Instead, the Bill looks back to confirm spending totals for 2018-19, to ensure that the Northern Ireland civil service has a secure legal basis for its spending in the past year. Taken as a whole, it represents the minimum necessary intervention to secure public finances at this juncture.

Let me turn briefly to the Bill’s contents, which largely rehearse what I set out to the House in spring last year when I introduced the Northern Ireland Budget (Anticipation and Adjustments) Act 2018. In short, the Bill authorises Northern Ireland Departments and certain other bodies to incur expenditure and use resources for the financial year ending on 31 March 2019—this month.

Clause 1 authorises the issue of £16.8 billion out of the Consolidated Fund of Northern Ireland. The allocation levels for each Northern Ireland Department and the other bodies in receipt of the funds are set out in schedule 1, which also states the purposes for which the funds are to be used.

Clause 2 authorises the use of resources amounting to some £20 billion in the year ending 31 March 2019 by the Northern Ireland Departments and other bodies listed in subsection (3).

Clause 3 sets revised limits on the accruing resources, including both operating and non-operating accruing resources in the current financial year. All are largely as they appeared in the Northern Ireland Budget Act 2018. The revised totals for Departments appear in schedules 1 and 2.

Clause 4 sets out the power for the Northern Ireland civil service to issue out of the Northern Ireland Consolidated Fund some £11.8 billion in cash for the forthcoming financial year. That is the vote-on-account provision that I have already outlined. It is linked to clause 6, which does the same in terms of resources. The value is set at around 70% of the sums available in both regards in the previous financial year. Schedules 3 and 4 operate on the same basis, with each departmental allocation simply set at 70% of the previous year, and clause 5 permits some temporary borrowing powers for cash-management purposes.

As I have already noted, all these sums relate to those that have already been voted for by Parliament, together with revenue generated locally in Northern Ireland. There is no new money in the Bill; there is simply the explicit authority to spend in full the moneys that have already been allocated.

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[Sammy Wilson]

May I take the Secretary of State back to where she started, before she began going through the departmental allocations and the detail of the Bill? The whole point—it has been made time and again by Democratic Unionist party Members—is that there is no scrutiny of how the departmental allocations were reached. She is right that that scrutiny would normally be done through Stormont, but Stormont is not operating. A mechanism is available here, but there seems to be reluctance to use it because of the possible reaction from Sinn Féin. Not only is Sinn Féin stopping scrutiny in Stormont; the fear of how it will react is stopping scrutiny here. When will the Secretary of State realise that Sinn Féin cannot block the scrutiny of how money is spent in Northern Ireland by keeping the doors of Stormont shut and causing fear here about how it may react when we try to do the job in this place?

[Karen Bradley]

I know how strongly the right hon. Gentleman feels about that point, which he has raised on several occasions. He will know that we consulted on the process with all five main parties in Northern Ireland, with the Opposition and with the Northern Ireland Affairs Committee to allow some prior scrutiny of the figures. All parties had full sight of the figures that we published in last week’s written ministerial statement. He is absolutely right that normal scrutiny procedures are not in place—they will be in place only with the restoration of devolution—but I caution him against trying to create artificial scrutiny processes that might well set a precedent for the future across all the devolved nations. The right scrutiny processes are available to respect the constitutional arrangements across the whole United Kingdom and all the devolved Administrations.

Civil servants are taking decisions—not major policy decisions, but the decisions that the Northern Ireland (Executive Formation and Exercise of Functions) Act 2018 enables them to make and that we want them to be able to make. We have to be very careful about the civil service’s separation and independence from scrutiny by political masters. It is the political decisions that need scrutiny, not the decisions of civil servants. We would like to see Departments given full scrutiny in Stormont, as happens in this House, but we have to be very careful about the constitutional arrangements.

That brings me back to my point that the Bill would ordinarily have been taken through the Assembly. Clause 7 therefore includes a series of adaptations that ensure that, once approved by both Houses in Westminster, the Bill will be treated as though it were an Assembly budget Act. That will enable Northern Ireland public finances to continue to function, notwithstanding the absence of an Executive.

Alongside the Bill, I have laid before the House, as a Command Paper, a set of supplementary estimates for the Departments and bodies covered by the budget Bill. Those estimates, which have been prepared by the Northern Ireland Department of Finance, set out the breakdown of resource allocation in greater detail.

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[Sammy Wilson (East Antrim) (DUP)]

General disappointment has been expressed that, for the third year now, expenditure in Northern Ireland is being approved through this unusual process in the House, with little or no scrutiny or knowledge of how the allocations to Departments have been decided. We do not know what arguments were made for giving 3.8%—or whatever it was—to health and 1.1% to education, while other Departments suffered an overall reduction and others’ budgets were kept static. We have had no opportunity to ask civil servants what cases were made or whether they were valid. As my hon. Friend the Member for Belfast East (Gavin Robinson) pointed out, it is not that there is no mechanism for such scrutiny; it is simply that a choice was made not to use the mechanism that is available through this House.

Of course, this should all have been done at Stormont. During the budget process, its committees ought to have brought civil servants in, asked them what bids were being made and what arguments were being employed, and then made a judgment on the merits of each case. However, we are not in that position—not because parties in Northern Ireland do not want the opportunity of scrutiny at Stormont, but simply because they have been prevented from carrying it out.

Using the terms of the arrangements for setting up a Government in Northern Ireland, Sinn Féin has been able to prevent the coalition arrangement that was forced through in the Belfast agreement from being implemented. Because including the two main parties in the Executive is a compulsory imposition rather than a voluntary arrangement, if one of those parties throws a hissy fit and decides that it does not want to be in the Executive, everybody is kept out—not just from the Executive, but from Stormont and from all the roles and responsibilities that they were elected for and would normally be entitled to carry out.

The Secretary of State quite rightly says that this process should be done at Stormont, but she knows that it cannot be done there. Like the shadow Secretary of State, I do not place the blame totally at the door of the Secretary of State. She has to operate within the rules, and the rules state that if one party decides to veto, not a great deal can be done about it. For reasons that I will explain in a moment or two, no powers of persuasion will persuade Sinn Féin to go into Stormont at this particular time; they have made that quite clear. Sinn Féin have thrown up every barrier. Whatever magic wand the Secretary of State might wave, she is not going to persuade them otherwise. However, there is one way in which she could put pressure on them, which is by making it quite clear to them that, through their inaction, the very thing that they do not want to happen—that is, rule by London—will happen, unless they are prepared to accept their responsibilities in Northern Ireland.

We find it difficult to understand why there has not been a willingness to take Sinn Féin on in that way, but I suspect that it is because of the advice given by the Northern Ireland Office, known colloquially among Unionists in Northern Ireland as the nest of vipers. The position of the Northern Ireland Office seems to be, “Don’t annoy Sinn Féin and don’t annoy the Irish Government.” I suspect that a large part of the reason why we have not moved to greater scrutiny and greater decision making by Ministers here is the advice of the Northern Ireland Office: “Don’t rock the boat.” But if we don’t rock the boat, we are going to stay on the path that we are on at present, which does not provide scrutiny of the most important issue for politicians—the expenditure of resources for the benefit of the community.

Not only do we not have scrutiny of the overall budget allocation, we do not even have scrutiny of the efficiency of current spending. Looking through the various headings for expenditure last year, or through the proposed 70% expenditure for next year, we can see many areas where there is great concern about the way in which money is spent. I will pick out just a few. Take, for example, the Department for the Economy. We have been trying to increase connectivity in Northern Ireland, yet despite all the evidence that supporting access to air services to other parts of the world helps economic growth, we have found an unwillingness to spend money in that area. One of the reasons that the Department has given is, “We don’t have any direction from a Minister. It’s not a decision that the civil service can make.” My hon. Friend the Member for South Antrim (Paul Girvan) has lobbied hard on this issue because Belfast international airport is in his constituency and there could be huge opportunities there.

Petroleum licensing is another example. There are huge opportunities in Northern Ireland but we cannot even get consultation on licences that could create hundreds of jobs in mining and oil exploration in rural areas in the west of the Province, where high-paid jobs are hard to come by. Money for broadband has been reprofiled because, despite the fact that £150 million was made available, decisions have not been made about spending that money. Hopefully, with the start of the money that has been allocated this year, we will find that the programme will be accelerated over the next number of years.

We allocate money to Tourism Ireland, and many people query whether that money is used effectively. When people travel into Belfast international airport, what hits them in the face when they come off the plane? An advert to send tourists who arrive at that airport down to Dublin—and our money pays for it. Yet there is no scrutiny of whether that is an effective way of spending public money to promote Northern Ireland.

I could go on with lots of other examples, but that is the kind of vacuum we are left with because of the lack of scrutiny not just of the general allocations of money across Departments but of the specific allocations within Departments.

[Maria Caulfield (Lewes) (Con)]

As members of the Northern Ireland Affairs Committee, we hear at first hand, nearly every week now, about how the lack of an Assembly and an Executive is affecting ordinary people, whether it is money not being spent on healthcare, schools where parents are having to bring in toilet rolls, or the Police of Service of Northern Ireland not knowing whether it can pay its staff at the end of the month. This is impacting the real lives of real people.

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[Sammy Wilson]

The hon. Lady mentioned education. In the year for which we are now finalising the accounts, additional money was secured for education. That money was meant to go to frontline services in education—that is, the classrooms—but the Department of Education decided to allocate it to finance the education authority, which was running a deficit, and was leaning on schools that were running a deficit in their budgets. That is the kind of thing that would never have been allowed to happen if we had a functioning Assembly and a Minister rather than civil servants making these decisions. It is not just about the total amount of money that is allocated; we also have to be looking at how effectively that money is spent, and we do not have the means for doing that. If it cannot be done in Northern Ireland, then there should a means for doing it here.

The Secretary of State gave an explanation why she had allocated 70% of the expenditure to Departments for next year as opposed to the usual 45%—because there might be heavier expenditure at the beginning of the year than at the end of the year, and she therefore wanted to make sure that Departments did not run out of money. Given that most of the revenue expenditure has to be spread over the year because a lot of it goes on salaries and so on, I do not think that is a credible explanation. I think the Secretary of State knows full well that we will not have an Assembly up and running by June, because she knows what the problem is. She has talked to Sinn Féin and she knows the attitude of Sinn Féin. I suspect that 70% has been allocated so that she has the flexibility maybe even to bring the final budget to this House in September or October rather than be forced to bring it early in June because there is no Assembly up and running.

That brings me to one of the reasons why I believe we are having to do this again this year. Many people have said that it is about Brexit, or the fact that Sinn Féin cannot get agreement with the DUP about certain matters like an Irish language Act. Having said that, I do not know how anyone justifies tens of millions of pounds of expenditure on an Irish language Act at a time when we have the pressure on budgets that we have now. Certainly, it should not be a priority for expenditure or getting Stormont up and running again.

I welcome the additional money. For the information of the hon. Member for Paisley and Renfrewshire North (Gavin Newlands), this is not a result of the Barnett formula not being properly applied. The Barnett formula is properly applied. Barnett formula allocations for Scotland and Northern Ireland are based on the expenditure decided for Departments in England. If there is an uplift in areas of spending in those Departments, it also comes to Scotland, Northern Ireland and Wales.

This is money over and above the Barnett formula. Scotland has experienced that on occasions, but we did not complain about it. It is wrong to suggest that this is a result of the Barnett formula not being properly applied. Some of the changes to the allocations that we are authorising for 2018-19 are a result of Barnett formula applications during the year, with additional money put into the budget since we discussed it last June having to be spent by Departments.

This is a challenging budget. The real reason why Sinn Féin are not prepared to enter the Assembly is that they do not have the political courage to make the decisions that a budget of this nature would require them to make. There is plenty of evidence for that. First, why did the Assembly collapse? Despite what people say about the renewable heat scheme and everything else, the Assembly would have collapsed anyhow, because the then Finance Minister had not even presented a budget to the Assembly. If it had not been presented to the Assembly, the Government would have collapsed because there would have been no money to spend. Why did he not present a budget two and a half years ago? Because he knew that there were hard decisions to be made, and he was not prepared to make them. His party was not prepared to go through the Lobby to back those decisions because it was looking over its shoulder at People Before Profit, which had taken votes off it in its heartlands in West Belfast and Londonderry.

If that was the problem then, it is still the problem today. Sinn Féin do not want to have to put their hand on the tiller and guide Northern Ireland through the difficulties of budget considerations. Governments here and in Scotland and Wales have to do that, as indeed do Governments in the Irish Republic. Sinn Féin would rather strut around the Irish Republic telling people that if they vote for Sinn Féin, the Government down there will not have to impose austerity measures. Of course, the one way to expose the nonsense of that claim is by Sinn Féin having to make decisions about budgets in Northern Ireland, but they do not want to do that.

That means that we have not been able to look at new areas of expenditure, and that is significant. Members have talked today about new pressures. For example, there is greater pressure on school budgets because of rising populations and a change in the distribution of populations, which sometimes expand and sometimes decline. There are greater pressures on mental health, which my hon. Friend the Member for Strangford (Jim Shannon) talked about. This budget reflects the decisions and priorities of the Executive of more than three years ago. Indeed, if we look at the heads of spending for 2018-19 and 2019-20, we see that it is a cut and paste. There are no new things, because that is not possible.

We pass legislation here to allow top civil servants and permanent secretaries to take decisions that could redirect some spending, but civil servants—wrongly, I think—have refused to use those powers on many occasions. It is frustrating that they have not been prepared to make decisions on even simple things, because they fear that if something goes wrong, they will be called before the Northern Ireland Audit Office or finish up on the front page of the Belfast Telegraph. It is not a great way of doing it, but at least some of these decisions should be made by civil servants.

We have a lack of scrutiny of the overall budget and of the detail of the budget, and we have no mechanism for deciding new priorities, all of which we are going to need in a dynamic economy. That is why this process is so damaging to Northern Ireland. It is damaging politically because it allows people simply to opt out of the political process. They entered that process, stood for election and got elected, but then they do not do their job.

I know there will be debates about how to do this, but I think one of the ways of pushing into doing their job properly those who are holding back our ability to do the job—we are doing it, and doing it very poorly, here today—is to make it quite clear that the stark choice is either to have local rule or to have rule from London. I believe that would be a huge embarrassment to Sinn Féin. It has been able to avoid that embarrassment because the Government here have refused to make such a decision.

We want to see devolution and we want people to be pressurised into going back into Stormont, however difficult that may be. Let me just say to the House that it is difficult. Look at the difficulties the Government have with the disparate views they have on their own Back Benches in this place. It is an indication of the skill that was used by politicians in Northern Ireland that, for many years, we ran a coalition that included people who would very happily sit on the Government Benches as well as people who might be uncomfortable sitting beside the Leader of the Opposition on the Opposition Benches because they are even to the left of him. We ran a coalition on that basis, but it has now collapsed, and following its collapse, this is an inadequate way of doing business for Northern Ireland.