Northern Ireland Budget (No. 2) Bill

Sammy Wilson Excerpts

2nd reading
Monday 10th July 2023 Commons Chamber

[Sammy Wilson (East Antrim) (DUP)]

As the Secretary of State has said, tonight’s debate and the Bill are simply to allocate money, which we have already decided on in previous debates, to various Departments. Although I made a promise to the Minister of State when we discussed this on Thursday that we would try to stick to the debate on the budget and try not to wander into the Windsor framework, Brexit and the Northern Ireland protocol, the issue of—

[Claire Hanna (Belfast South) (SDLP)]

Another promise broken.

[Sammy Wilson]

The promise actually was broken by the Secretary of State. It was a two-sided promise: that would not be raised by Ministers, who would be sensitive to the issue, knowing what our answer to these issues are and, in turn, we would stick to the budget debate. That promise has not been kept, so it would be remiss of me not to make it clear, as has been made clear by my party leader in an intervention, that we want to see the Executive up and running, but there are rules for the working of the Executive. There are important safeguards for the Executive to work: the views of both communities have to be respected, accepted and reflected in the decisions made in the Executive and in the decisions made by the Executive.

As things stand, with the protocol and the framework, there will still be a requirement for foreign law to be imposed in Northern Ireland and for Ministers of a Unionist disposition to operate that system—a system that the Government, even in the Windsor framework discussions, indicated would lead to divergence between Northern Ireland and the rest of the UK. A paltry safeguard of the Stormont brake was put in but, even if it worked, it still would not stop Northern Ireland becoming further away from the rest of the UK because of decisions made in this House about laws that would affect the United Kingdom, excluding Northern Ireland.

I have to say to the Secretary of State that, while that situation pertains, he cannot ignore the requirements of the law in Northern Ireland. The views of both communities must be reflected, accepted and implemented in the Executive and the Assembly. If that does not happen, they cannot function because we do not have the basis for agreement and for decisions being made.

It is debatable, of course, but we can talk about the Executive, up and running, being able to decide and resolve some of the issues that have been talked about here today. As I go through my speech, I point out that the Executive, its implementation and existence is not essential to deal with some of the fundamental issues that have given rise to the budget problems that Northern Ireland is facing.

I wish to make two points, the first of which is about the impact of the budget on services in Northern Ireland. Like the SNP spokesperson, the hon. Member for Gordon (Richard Thomson), I do not want to go through every Department but, as this has been raised by two or three speakers already, one of the starkest indications of the budget problem we have in Northern Ireland is to be found in education. There will be a 2.8% reduction in education spending in Northern Ireland, while in England there will be a 6.5% increase. That will affect the aggregated schools budget: the amount of money that goes to individual schools. It will particularly affect youngsters with special educational needs because, of course, as has been said, the easiest things to cut are things like classroom assistants. Of course, spending on classroom assistants and support for people with special educational needs is to be cut by 50%. There are already 11,000 children diagnosed with special educational needs who will be affected, and there is a waiting list of 400 children who have not even been placed, so we can see the ongoing problem and the problems we will build up over the years because of the cuts in the education budget. I could also talk about aspects of the education budget that are designed to help youngsters from deprived backgrounds, such as measures on school meals that were introduced by the Minister from my party. They will have to be reduced as well, which again tends to affect children from the most disadvantaged areas.

Let us take the other example, which has also been mentioned. I served for some time on the Northern Ireland Policing Board. Policing is important for any community, and it is particularly important in Northern Ireland because of the ongoing terrorist threat, the problem of paramilitaries and the terror gangs and criminal gangs associated with them, and the impact that has on communities. New Decade, New Approach made a commitment to have 7,500 officers, yet the figure is set to fall to about 5,700 officers. In the next two years, 850 officers are going to retire. The money is available to recruit only 204, so the situation will get worse and worse in terms of police officer numbers, which will fall below the commitment made on how many are required in Northern Ireland.

[Chris Heaton-Harris]

We have just had a debate about making sure that we are factually correct in this place. I am quite sure that what the right hon. Gentleman is saying is absolutely factually correct. However, does he not recognise that the commitment to increase police numbers to 7,500 that he is talking about was a commitment by the Executive? Would the choices that he has outlined not be better served by an Executive functioning and an Assembly scrutinising?

[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.

[Claire Hanna]

Does the right hon. Gentleman acknowledge that the Bengoa report outlined how we could tackle that reform and get ourselves to a more sustainable delivery, but that the Assembly has been collapsed for, I think, four of the six years since that that report was delivered, and that only way we can deliver those reforms, necessary as many of them may be, is in a restored Executive?

[Sammy Wilson]

That is the whole point. Ministers have had the Bengoa report, as the hon. Lady says, for years. They have never acted on it. Indeed, some of the health reforms that were acted on and some of the politically difficult changes that were made in Health were made by a DUP Minister. We have given the lead on trying to deal with some of the spending issues. However, even with those savings, there are still the issues of fairness, of whether the Budget is sustainable, and of why we are not implementing in Northern Ireland the kind of budget reallocations that are implemented in other parts of the United Kingdom.

We will find the issues arising from this budget coming back to the Floor of this House time and again, because Departments are not going to be able to work within the existing budgets. Furthermore, since the Minister indicates that the Barnett consequentials that should be coming through will not come through this year because of the overspend in previous years, when it comes to the payment of nurses, teachers and so on, there will be greater pressures on the budgets of various Departments across Northern Ireland. I do not know whether those are reflected in this budget. That is why it must be accepted that, until the Government are prepared to look at measures that create the grounds for the formation of the Executive again, this issue will rest with the Secretary of State and he will have to take responsibility for it.

--- Later in debate ---

[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.

[Sammy Wilson]

Does my hon. Friend agree that a financial allocation made on a purely needs basis would provide the resources to start addressing some of those needs? For example, if there were a high number of people claiming unemployment benefit because they had mental health problems, money could go into the health service to deal with those problems and get them into work, or for people unemployed because they did not have skills, the money could be used on technical education to give them the skills so that they could get back into work. The vicious circle that has been spoken about could be addressed by having the resources to deal with that.

[Carla Lockhart]

Absolutely. I thank my right hon. Friend for his intervention.

We want a restored Executive not only to have firm cross-community consensus, but to be able to transform and deliver services effectively. For that, we need financial equipping based on need. As my right hon. Friend has indicated, those needs are really to the fore. If I think of my constituency, I think of the educational underachievement and the health needs. Those are the things we need to drill down into and fund adequately; if we do not, Northern Ireland will continue to be short-changed.

The Northern Ireland Office has recently been seeking to provoke discussions around revenue-raising measures. There is no question but that we are up for those discussions, but we cannot escape the fact that the Treasury’s contribution to funding public services in Northern Ireland is going down rather than rising. Spending up to 2025, for example, will increase by 6% in England but only 3.6% in Northern Ireland.

I have a specific concern about the impact that the policing budget will have on communities. The right hon. Member for Chipping Barnet (Theresa Villiers) made a very helpful intervention on that subject: it was a stark reminder that the terrorist threat level in Northern Ireland is severe. In that context, we just cannot continue to ignore the concerns that the chief constable and the Police Federation have raised in relation to the capability of our police force.

Despite the commitments in New Decade, New Approach to grow our officer numbers to 7,500, the stark reality is that we are now on a trajectory towards 6,000, largely because of a failure to prioritise policing in our Province. The truth is that there is a risk of the headcount dropping further, unless the Government urgently deliver the financial firepower that local policing is crying out for. In an intervention on my right hon. Friend the Member for East Antrim (Sammy Wilson), the Secretary of State made the point that that is on the Executive, but I would put the ball back into his court: it was an agreement in NDNA. When there was a language issue in NDNA, this Government very quickly helped and intervened, yet on the policing issue they have not gone far enough. The NIO claims to support the excellent work that the PSNI does. It needs to back up that claim and actually financially support it.

Similar challenges exist for health, education and roads. Time does not permit me to list the challenges that I am seeing daily in my busy constituency office, so I will draw my remarks to a close on the time issue. The time for the Government to act on funding for Northern Ireland is now. The time to act to review the Barnett formula is now. The time to take the necessary steps to restore cross-community consensus for devolution is now. It would be wholly unacceptable and utterly reckless if time were allowed to pass and we found ourselves passing another budget Bill in this place, as opposed to in Stormont.