Northern Ireland Budget (No. 2) Bill

Simon Hoare Excerpts

Committee of the whole House
Monday 4th September 2023 Commons Chamber

[Tonia Antoniazzi (Gower) (Lab)]

It is an honour to serve under your chairship, Dame Rosie, in this Committee. I will keep my remarks brief to allow us to hear from the Northern Ireland parties on Third Reading.

Once again we come together to debate legislation that should be dealt with in Stormont. We still have civil servants running Departments with restricted powers, trying to plug a gap of £800 million and unable to consult with Cabinet Ministers. Stormont is the right and proper place for scrutiny to take place. In this place, we cannot simply provide the level of consideration and scrutiny that this budget deserves.

To quote today’s report from Pivotal,

“managing this situation has been extremely challenging, if not impossible, thanks to two interlocked problems: no political leadership for decision-making and impossibly tight budgets.”

On the first problem, sadly I have seen no sign over the recess that indicates the restoration of the Northern Ireland Executive is any nearer. I would welcome hearing from the Secretary of State what discussions he has had over the summer with parties in Northern Ireland, as the situation is now beyond breaking point.

On the second problem—the budget—we do not oppose the Bill, as services are in desperate need of funding, but the fact is that this budget is not enough to address the problems facing public services in Northern Ireland. A real-terms funding fall of 3.3% means that existing services simply cannot continue to function as normal. The people of Northern Ireland have been left facing cuts to support and increases in charges for everyday necessities during the cost of living crisis. While we appreciate the need to explore avenues to raise revenue, the measures put forward so far may cause more societal damage than the monetary gain is worth. As I have mentioned, we are missing a vital level of scrutiny and accountability for these measures.

We, the Labour party, agree with the principle that local decisions should be made by local politicians, but the situation is now extreme. While there continues to be no functioning Executive, I ask the Secretary of State to consider what he can do within his power to help the people of Northern Ireland. This is a critical state of affairs, and the full impact may not yet be realised, as any overspends will inevitably lead to further cuts the next year. The only viable way forward for Northern Ireland is the restoration of the Executive, and I implore the Secretary of State, the Minister and the main parties in Northern Ireland to ensure that happens sooner rather than later.

[Simon Hoare (North Dorset) (Con)]

If I may, I will both put on record my thanks to the hon. Member for Hove (Peter Kyle) and my congratulations on his new job, and welcome the right hon. Member for Leeds Central (Hilary Benn) to his new position. I remember the speech the right hon. Gentleman gave in our debate on the anniversary of the Good Friday agreement, just before the Easter recess, which showed a depth of knowledge of, interest in and love for Northern Ireland. I am sure that the Secretary of State, the Minister of State and, indeed, the Northern Ireland Affairs Committee look forward to working with him in the weeks and months ahead.

While I understand that new clause 1, tabled in my name and that of my right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland), has not been selected for debate, I hope that the Minister will give some consideration to the merit that underpins the argument with regard to the maintenance of the Audit Committee, notwithstanding Stormont not being in place.

The hon. Member for Gower (Tonia Antoniazzi) is absolutely right. The delivery of public services in Northern Ireland is under huge pressure as a result of the covid backlog in health, as we know, and an increase in demand with a shrinking supply. The recent events with regards to the PSNI will clearly be putting additional pressures on other budgets as well.

The restoration of Stormont would not provide all the keys to unlock all the currently locked or semi-locked doors, but, by God, it would make a huge difference. The hon. Lady is right on that. I have said right from the start that one can understand the points and principles of the Democratic Unionist party with regard to the protocol and the Windsor framework, but I think the Government have made it clear that will not change; it just has to be made to work. The Minister in the other place has signified that there will be additional statutory instruments. My cri de coeur is one that I have made before—it has hitherto fallen on deaf ears. This is a situation affecting public services and those who are most reliant on them. Those people—protected to some extent by this necessary budget Bill—have no choice other than to use the services provided by the state and the public sector. They cannot go elsewhere. They are looking to local politicians with a depth of understanding to find the answers to these questions.

I appreciate that this is a slightly wider point, but this Bill is required—it is brought about not through the desire of Government but through necessity. That necessity could end, and it could end tomorrow. That would lead to better governance, better decision making and transformational approaches to the delivery of public services, getting more bang for the buck and a better uplift for the people of Northern Ireland. Those of us who are committed to public service should be seeking that. I therefore support the Bill, and will support the Government in any votes in Committee or on Third Reading, but it is a sad day when we have to pass such a Bill because of some who are resiling from the positions of trust to which they have been elected.

[Sir Robert Buckland (South Swindon) (Con)]

rose—

--- Later in debate ---

[Gavin Robinson (Belfast East) (DUP)]

It is a pleasure, as always, to follow the hon. Member for Belfast South (Claire Hanna), my constituency neighbour, but the content of my speech will be slightly different from hers.

I will not delve into the Committee stage, amendments that were tabled but not brought forward, or amendments that were needlessly provocative and stepped far away from the principles that the party that tabled them purport to stand for, but I want to talk about the Northern Ireland Budget (No. 2) Bill, which is the second such budget Bill that has been before this House this year.

When we discussed the original Bill, it was just called the budget Bill, rather than No. 1 or No. 2. We were dealing with last year’s financial position and, at that stage, Members from my party introduced the discussion around need. We challenged the Government about their understanding of need, and we were patronised at that time. We were told, without any sense of irony, shame or knowledge of the facts, that in Northern Ireland we are over-funded and get £1.21 for every £1 that is spent in England.

But still we tried to bring the conversation back to assessed need and the similar process that Wales had to go through over five years with the Holtham Commission. However, there was no sense that the position that we were outlining, identified by the Northern Ireland Fiscal Council in September last year, was a position that recognised that while our Budget may grow by 3.6%, public spending in England was going to grow by 6%, or a recognition that by the end of this financial cycle households in Northern Ireland would each be £2,000 less well-off than their counterparts in the rest of the United Kingdom, and therefore there was a budgetary problem. It has taken from January of this year to now for that seed to start germinating.

When there is a recognition in public discourse that this is a punishment budget before us this evening—this has been described as a punishment budget, which has been ignored by those in power—and no decision is taken to change it meaningfully or beneficially for the people of Northern Ireland, it will hurt us economically. We cannot systemically assess Northern Ireland public finances and know that what Northern Ireland gets is less than what it needs and not recognise that that has a material impact on the delivery of public services. Yet that is exactly what we are discussing this evening. The Fiscal Council has now published and what it says is recognised. I remember the back and forth with the Chairman of the Northern Ireland Affairs Committee. I was grateful that he took on my request to carry out an inquiry on this issue. He has been on a journey and now recognises that when the Fiscal Council says what we need to deliver effective public services with £1.24, we are getting less than what we need. When that is done year on year, there is a compounding negative impact. It means that every year we are starting with less and that this budget simply has a recurring feature of making sure that public services in Northern Ireland are denied the money that they need to be operated effectively.

I know that repetition is not sinful in this place, but it is worth reiterating time and again that, until the Government embrace this discussion meaningfully and properly, Northern Ireland public services will not be able to flourish. Drastic decisions that are being taken and have been taken will continue to be taken.

[Simon Hoare]

What the hon. Gentleman is saying is undoubtedly true, but does he also accept—I think the Select Committee has been hearing this during our inquiry—that there is a real sense of frustration among many of the professional practitioners about the absence of the delivery of transformational change: delivering public services in a different way; or getting more bang for the buck, to put it more crudely. A functioning Executive in Stormont would lead to some big, bold and brave decisions. I understand that would be difficult for parties across the piece, but trying to deliver public services in the same old way in the absence of transformational change, given budgetary pressures across the public purse in respect of whichever party in the UK, is an opportunity that is missed and is to the detriment of people across the whole of Northern Ireland.

[Gavin Robinson]

The best that can be hoped for in this scenario is that a return to devolved Government means that locally elected representatives and Ministers in an Executive can make the choices based on the information put before them. The hon. Gentleman cannot—nor can I—dictate what those choices should be. The choices have been there for previous Executives, yet I may argue that the wrong decisions have been made. But what I am suggesting in the here and now is what we can control. Not only are we continuing to finance less than what we need, but we are continuing to break parity between the delivery of public services in Northern Ireland and England, Scotland and Wales.

The former Secretary of State, the right hon. Member for Skipton and Ripon (Julian Smith), who is in his place, will remember the pay award parity issue that abounded whenever he was embarking on the New Decade, New Approach discussions in 2019, culminating in a deal in 2020. The first nursing strike ever in any part of the United Kingdom was based on that pay parity issue alone. And here we are, just three years later, and parity has broken again. Here we are from the last financial year and we recognise that there is not only a £500 million projected overspend this year, but a £575 million public pay pressure. When we add on the overspend from last year, which was £297 million but now seems to be £254 million, the figure, whatever it is, takes us close to a deficit of £1.3 billion.

I agree with the Secretary of State when he said—I am sure with much thought—that Northern Ireland does not need the sticking plaster of a one-off financial package. Let me be very clear that not one person from my party, or anyone sensible from Northern Ireland, has suggested that what we need is a one-off, one-year sticking plaster to fix a problem that is of this Government’s making. We are asking for a pragmatic and mature reflection on how much it costs to deliver Northern Ireland’s public services, and to get on with recalibrating the Barnett formula to ensure that we can do so. That is what we need. That is not yet what we have. The choices will be there for a new Executive.

The second most drastic thing that I think the Government have introduced into the debate is the notional view that we just need to get on and raise revenue. You have heard it, Madam Deputy Speaker. The Minister mentioned it this evening: a £27 billion budget for the forthcoming year. Take household rates, the biggest household contribution to the public finances that individuals make outside of tax and national insurance, with £1.7 billion raised each year. Can we honestly imagine indicating in a cost of living crisis to our public, businesses and wider society that they should double their domestic and non-domestic contributions to household rates? Doubling them would allow us to get close to where we need to be. No problem. By 2025, we will have £2,000 less than every household in England, but add another £2,000 on, please, to stand still. Get real. Transformation? I have an idea: let us raise money by increasing tuition fees.

That brings me back to when I replied to the hon. Member for North Dorset about the choices that an Executive will have. We cannot determine those, but in the past whenever people were saying that there should be an increase in tuition fees it was for a beneficial outcome. Increase tuition fees and we can get rid of the maximum student numbers cap. Increase tuition fees and we will be able to fund more places so that our best and brightest will no longer have to leave Northern Ireland to be educated in England, Scotland and Wales, or anywhere else in the world. Those were positive benefits from an increase in tuition fees, yet it was never politically acceptable. Now what is on offer is just raising the cost to stand still, or to provide public services when we know that what we get is not sufficient to match the need.

Nobody is asking for a sticking plaster. Nobody can say what the choices shall be. I did not intend to speak for as long as I have, and I want to let other people contribute, but here we are again, with the second budget Bill of the year and the same challenges. It is progress at least that on 5 July the Deputy Prime Minister accepted for the first time, in response to a question from my right hon. Friend the Member for Lagan Valley (Sir Jeffrey M. Donaldson), our party leader, that finances in Northern Ireland need to be predicated on need. That was the first time that we had heard that. Having been dismissed and ignored in January, we had acceptance of it in July. Yet the challenge is there for the rest of the financial year.

The punishment budget that has been outlined and is being advanced this evening will continue to cripple the effective delivery of public services in Northern Ireland. I have heard nothing from the Northern Ireland Office, or from anyone else around Government, to suggest that they are in the space of turning that around within this financial year. We are halfway through it. We want to see political progress, but the idea that we get political progress only for an incoming Executive to falter because they cannot deliver for the people would be the biggest crime of all.