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

Tony Lloyd Excerpts

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

[Karen Bradley]

The hon. Lady makes a number of important points, the first being that we have rightly increased spending for the Department of Education. This is an area in which there is a clear need for increased spending, and the permanent secretary at the Department was keen to ensure that the Government were aware of that. That is why, in the allocations for 2019-20 that were set out in the written statement last week, there is an increase in spending power for the Department of Education. The hon. Lady also makes a point about how that spending happens. The difficulty in the absence of Ministers in Stormont is that spending cannot be directed from this House. She also refers to issues within education in Northern Ireland. There is an undoubted need for reform of the system to ensure that money is spent appropriately and gets to the frontline and to the children and students who need it most, but we need Ministers to do that, which is why Stormont must be restored as soon as possible.

[Tony Lloyd (Rochdale) (Lab)]

I am interested in what the Secretary of State said in response to the hon. Member for North Down (Lady Hermon). I am looking at the Secretary of State’s written statement and the announcement of an extra £140 million for education, health and, as it happens, justice, but she says that it was provided

“in recognition of the lack of opportunity for more fundamental service reconfiguration over the last 12 months”.—[Official Report, 28 February 2019; Vol. 655, c. 23WS.]

This may be new money, but it will provide no new services and it comes as a result of a failure of the political process in Northern Ireland to reconfigure those services.

[Karen Bradley]

The additional funding for health and education is partly down to the new money that the Treasury has found—the £140 million—but it is also down to Barnett consequentials and other reasons. We have worked to ensure that the money that is needed by Departments, as requested by the permanent secretaries, is given to them, but the shadow Secretary of State is right that it is for business as usual activities. Major policy decisions cannot be taken at this stage because that needs political leadership.

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[Tony Lloyd (Rochdale) (Lab)]

May I begin by offering a small prediction that, sadly, there will be very little coverage of this debate in the Northern Ireland media or beyond? That is a tragedy, especially when I compare it to a debate that might take place in a large local authority—in my city region, for example. There would be massively more local media interest in such a debate for a particular reason: there is engagement with the political process. At the moment, people are becoming disillusioned with the political process in Northern Ireland, and that is beyond a matter of regret; it is a matter of danger for us all, and we should recognise that.

As the Secretary of State said, there has been no functioning Stormont for over two years, as the Stormont Executive and Assembly collapsed on 9 January 2017. The Secretary of State has a unique role, in that at no point other than when the present Lord Murphy introduced a budget to establish the Assembly has a Secretary of State delivered a budget. This Secretary of State has now delivered two.

This is set against a background of a seeming lack of action on re-establishing the Stormont Executive and Assembly. I know that the political parties in Stormont will argue about who is responsible. However, the reality is that during the more than two years that have gone by, the level of activity has been low. The Secretary of State has met the political parties, but not regularly. A little over a year ago, when the Prime Minister went over to be part of this along with the Taoiseach, people thought and hoped, rightly, that there would be a resolution to the situation. The Prime Minister has not been engaged consistently since then. I am bound to compare that with John Major when he was Prime Minister before the Good Friday agreement was signed, with Tony Blair during the years when he was Prime Minister, and with David Cameron when he was Prime Minister. I have to say to the Secretary of State that we must see more concerted action. We have to see some ambition for real change.

I know that this will not please everybody in the Chamber, but let me quote Michelle O’Neill, the leader of Sinn Féin at Stormont, who said, when talking about a serious and meaningful talks process that removes obstacles to proper power sharing and delivers a successful outcome in restoring the Assembly, that

“we have yet to see Karen Bradley prioritise such a process”.

The Secretary of State may be cynical about Michelle O’Neill. I know that other hon. Members in the Chamber certainly will be. However, the same message is coming through to me from all the political parties that this Government have not been properly engaged in re-establishing the Stormont Assembly.

The Secretary of State has said to me:

“This Government will continue to observe all our commitments under the Belfast/Good Friday agreement.”—[Official Report, 13 February 2019; Vol. 654, c. 906.]

[Mr Gregory Campbell (East Londonderry) (DUP)]

The hon. Gentleman quoted the leader of Sinn Féin’s explanation of situations that had to come about in advance of the talks process. Does he agree that that sounded remarkably like a precondition to talks as well as a precondition to going into Stormont?

[Tony Lloyd]

When John Major was engaged in the talks process leading up to the Good Friday agreement, and Tony Blair even more intensely so, there were many preconditions on the table—of course there were. That is the nature of a talks process. Anybody who has ever engaged in meaningful negotiations knows that people do not walk in with no agenda, but the talks process has to get them together and iron out the differences. It has, in the end, to say what is held more in common and what is more important.

I will go through some of the things that, in the end, are more important when we look at what is not taking place in Northern Ireland now—some of the things that hon. Members have already raised. The hon. Member for North Down (Lady Hermon) mentioned the Hart inquiry. The Secretary of State has heard the demands in this Chamber, on a regular basis, that she take action. We have to look at the people across Northern Ireland. The politicians from all sides say that they want to get back to Stormont. Yes, we have to test the competence and the willingness of politicians really to negotiate, but the trade unions, the business community and civil society are also saying, “Let’s get Stormont back working.” That is so important, because without it the decisions are not being made that can make a material difference.

The business community and the trade unions have recently said to me that they cannot get decisions made on infrastructure investment. I know that the hon. Member for East Londonderry (Mr Campbell) will agree that the Derry and Strabane city deal is fundamental, and my hon. Friend the Member for Bristol South (Karin Smyth) will talk later about the pressing importance of a decision on the medical school there. Decisions are required on the upgrading of the A5 and the A6 and on higher and further education. This might sound like a trivial issue, but decisions are required on sewers in Belfast. The sewerage system in Belfast requires £800 million. People may wonder why that matters, but from 2021, no new facility will be connectable to that water and sewerage system. We want to see the Belfast city deal bring in new offices, industries and hotels, but that will not be viable if the sewerage system is not capable of taking them on board. That is not a joke; it is very serious.

[Gavin Robinson]

The hon. Gentleman is making an important point. I want to give another example, which is the Belfast power plant. When the Northern Ireland (Executive Formation and Exercise of Functions) Bill went through the House, we indicated the need to get planning consent for that, so that it could form part of our capacity auctions and the Utility Regulator could factor it into our future energy requirements. Without it, we will not be able to keep the lights on. Four months on from that Act being passed, we still do not have a decision, and we need decisions where they can be taken.

[Tony Lloyd]

The hon. Gentleman is right. Electricity is fundamental to our way of life. It is not a bolt-on extra, and it is not just a question of keeping the lights on; it is a question of keeping hospitals working and the world of work functioning. That is fundamental.

I want to touch on one area of progress. I am delighted to see that £55 million has been put into the budget for the legacy coronial process, which is a really important step forward. That is a decision by the Department of Justice, within the framework of this budget. However, there will be a consequence of that coronial process. If it is successful, which we all hope it will be, it will put pressure on the Police Service of Northern Ireland, the police ombudsman and the Public Prosecution Service. Those bodies will all need a resource base that allows them to complete the work of the coronial process. Otherwise, we will be giving an illusion to the families of victims of crime.

In that context, I also want to mention pensions for the victims of violence. There are issues to be resolved, but nobody in the Chamber would disagree that those pensions are necessary. All these things are urgent, because we have an ageing population, whether it is Hart victims or victims of the violence during the troubles. They will die without resolution of these issues unless action is taken.

I am bound to compare this issue to what we will discuss tomorrow, which is the contentious issue of tariffs under the renewable heat incentive. That is urgent, and the Government are acting—even though it is outwith the norms of Government power, according to the Secretary of State’s definition—because it is about money. The issues relating to the Hart victims and victims of terrorism are human issues, and they are just as urgent. If we can act on one such issue, we should think seriously about acting on others.

[Sir Mike Penning]

I have listened carefully to what the shadow Secretary of State has said, and he has made some very reasonable points. I would like to ask him two questions. First, it seems that there is little movement, and we can blame a lot of different people, but at the end of the day it takes two to tango and Sinn Féin needs to come forward and be part of the process. If there is no movement, does he think that direct rule is the answer, two years on? Secondly, he talked about victims. Has he forgotten the victims who were our soldiers, our people and our policemen on the streets of Northern Ireland, who are now being dragged before the courts? Does he not think that they need a mention?

[Tony Lloyd]

On the first question, it is very reasonable to ask what happens next. We simply cannot allow this vacuum to continue—decisions are not being made. I would say to the right hon. Gentleman that, from my perspective at the moment, I still think we have to say that the hope is for a restoration of the Stormont structures, because if we give up on that, we are giving up on at least the principle of what the Good Friday agreement delivered.

Democracy matters. The right hon. Gentleman would not accept the situation—I say this to him seriously—if I said that we were going to abrogate his local council’s need to function. This is not about getting two to tango, but probably about getting at least five parties in Stormont to tango, plus the Government here in London and, actually, the Government in Dublin. We have to see a much more concerted effort to get people around the table to try to break the logjam. If we start raising the spectre of direct rule at this point, we are saying that we are giving up on power sharing.

[Sir Mike Penning]

I do not quite understand the point the shadow Secretary of State is making. If a council is failing to deliver the services we would expect from it, the Government step in and deliver them, as we have seen in Northamptonshire. We have a situation in the Province where there is no governance. We cannot question what civil servants are doing, quite rightly, because they are civil servants. However, they are running the show, which is not a democracy. I ask again: if not today or next week, when, for Labour, does direct rule come in?

[Tony Lloyd]

I simply repeat to the right hon. Gentleman that I do not want to see direct rule—I genuinely do not—and there are massive issues with it. Some of my hon. Friends served as Ministers during the period of direct rule, and it is a very difficult and undesirable thing. I will say this, and it may give him a small hint: the Labour Government did bring in direct rule, so none of us can say that it will never happen. We are not there yet, but we are in a position where we have to see greater activity from the Secretary of State and—yes, of course—from the leaders of the political parties. I will return to that theme in a little while, because I want to make another point in that context, but I am definitely not giving up yet on Stormont being brought back into operation.

The right hon. Gentleman also asked me a totally separate question. By the way, let me make it clear to him that there were soldiers who were victims themselves, members of the then Royal Ulster Constabulary were victims. Many of them take the view that the justice process has to continue because they want justice or, very often, the families of soldiers and serving police officers want to know what happened to their loved ones. I think that is still a legitimate case to make, and it is one I will continue to make. We will no doubt debate this on other occasions.

[Dr Murrison]

As always, I am following all the hon. Gentleman has to say with a great deal of interest. He has mentioned victims, and he is right to do so. Will he say whether he would include within his definition of a victim those who are victims by virtue of actions by their own hand?

[Tony Lloyd]

I am afraid—to give the hon. Gentleman the answer he does not want to hear—that, yes, I think so. We have to cut through this very difficult situation, and we cannot delay payments to victims. It is controversial, and I am very well aware of that, but if we are going to delay payments to victims across the piece to get the perfect, then we may be waiting forever, and that would be at the expense of the ageing population of people who are now dependent on seeing some real progress.

[Dr Murrison]

I do appreciate that this is a sensitive point. In saying that, however, does the hon. Gentleman accept that he is condoning criminality, because that is what compensating criminals would be? It is an extraordinary thing—indeed, I would say, an unprecedented thing in this country—that the state should seek to compensate those who damage themselves by their own hand while engaged in terroristic activities.

[Tony Lloyd]

I do understand the difficulties. Let me simply say that this is probably not the right time to pursue this debate, although I am more than content that we ought to pursue it, because bringing to a conclusion the question of victims’ payments is clearly right and just, and it is important that it is done in this era, not simply deferred forever. However, it is probably not for today. I hope I have answered the hon. Gentleman’s question as directly as I could—I think it was a clear answer —and we will continue the conversation.

[Sir Mike Penning]

Will the hon. Gentleman give way on that point?

[Tony Lloyd]

Yes, but I do not want to continue this for too long.

[Sir Mike Penning]

It is clear that the hon. Gentleman does not want to talk about this issue, but it is vital, when we are talking about money that will go to schemes to develop the whole argument about victims, that we address the point made by my hon. Friend the Member for South West Wiltshire (Dr Murrison). We have plenty of time to do it now. How can it be right that someone who has attempted to kill a civilian, a member of the police force or soldiers on active duty gets compensation from the victims fund? I used to administer the victims fund when I was at the Ministry of Justice, and it is not perfect, but, for sure, one thing that I would not allow was that.

[Tony Lloyd]

It is rather interesting that the right hon. Gentleman says that I do not want to discuss the issue. I did. I answered the hon. Member for South West Wiltshire (Dr Murrison) very directly. I do not know what the right hon. Member for Hemel Hempstead (Sir Mike Penning) wants me to say beyond what I have said. If he wants to check the record, he should please do so. I am happy to continue the debate. If any Member wants to apply for an Adjournment debate, I will certainly turn up. They can ask the Secretary of State the same difficult question. It is a difficult question, but what we cannot do is freeze the process for victims, who, as I and the right hon. Gentleman agree, are absolutely worthy of compensation. We have to get on with it; that is the issue today. We need progress on all these issues, the difficult ones as well, then let us debate the finer points.

[Martin Whitfield (East Lothian) (Lab)]

There needs to be a comprehensive settlement, but are we not coming up against the same problem that was discussed earlier? The question of transparency in the Bill and the limits that the Secretary of State sets for disclosure of all items confine us equally when we talk about any one element of the Bill. We need to look at it globally—at all of it. We need some way to get through the lack of transparency to find out where the expenditure is going, how it is being asked for, and what is being sought.

[Tony Lloyd]

My hon. Friend makes a similar point about the lack of transparency to that which has already been made by a number of Members, including the hon. Members for Belfast East (Gavin Robinson), for Belfast South (Emma Little Pengelly) and for East Antrim (Sammy Wilson). They are right to make that point.

Any local authority would have a far more dignified debate than the one we are having today about the length of time involved and the capacity to scrutinise. The Secretary of State says that we would create a new precedent were we to change these things, but we are in very different circumstances because we do not have direct rule and we do not have a functioning Stormont structure. We are already in unprecedented terrain, and we have to find ways to make sure that transparency and scrutiny are done far better.

There are specific questions I want to come on to, but it is probably worth making the point that a lot of people in Northern Ireland are already concerned about the lack of engagement with the budgetary process. I know that they are not represented in this House, but I want to quote the Ulster Unionist party’s finance spokesman, Steve Aiken, who said:

“It’s a disgrace…that the NIO handled the engagement on next year’s budget so appallingly. The Secretary of State said in her budget statement that she has discussed the budget situation with the political parties—she has not. Tokenistic efforts do not constitute actual engagement.

Over the last ten days there have been three NIO budget meetings. The first ended in farce as the political parties were asked to consider options without being told what those options were, the second ended with only minimal information provided, and the third—just two hours before her statement was published—lasted minutes with again only bare information provided.”

That is not good enough to reassure the wider public or even people in this House that the process is transparent and accountable or has any processes for scrutiny. They simply are not there.

I have some specific questions and I hope that the Minister of State will pick up on them in his response. The Secretary of State said that this was retrospective, and of course not all of it is, because it sets out the budgetary headings for the coming year. It is important to recognise that. There is a real question. If Stormont were to begin to operate again at the beginning of April, would this budgetary process be transferable and amendable by an elected Stormont? Would it be able to change the budgetary headings?

[Karen Bradley]

That is absolutely the case. The shadow Secretary of State is absolutely right. The Bill puts on a statutory footing the spending that has already happened and that which will happen in the next three weeks up to the end of March. It also allows for a vote on account of 70% of the previous financial year’s spending in the following year’s spending, but nothing about this budget puts on a statutory footing any of the departmental allocations as set out in the written statement. That has to be done in a separate piece of legislation, which we hope will be done at Stormont. It could be amended and changed at Stormont, as seen fit by Ministers in Stormont.

[Tony Lloyd]

I very much welcome that reassurance. Will the Secretary of State also consider this point? The frame of reference in previous budgets is that 45% of the spend has been moved forward. That would take us up to September, roughly. This year, unusually, the Secretary of State has put in 70% of next year’s spend. That speaks to the point raised by the hon. Member for Belfast East, who made the legitimate point that there is no emergency. The original ambition was to put this through using emergency powers, but there is no emergency whatsoever. This could have been done at any other time, whether in March, April or May—well, the retrospective part cannot, but the part for next year could be.

[Karen Bradley]

It is probably helpful if I clarify that point. We have to put on a statutory footing, by the end of March, the spending for the financial year 2018-19—the year we are in. That is what we are doing. The vote on account of 70%, rather than the 45% we did last year, is because of the recognition of the pressures on the Departments in Northern Ireland as a result of having no Ministers, and because we have additional moneys coming through. If an infrastructure decision is taken, money will need to be spent. What I did not want to do was constrain Departments to be legally able to have only up to 45% of the previous year’s spending. The 70% reflects the fact that, because there are no Ministers and because of the unique circumstances in Northern Ireland the fact that there may well be decisions on infrastructure and on other issues that may require accelerated spending in a Department, I wanted to provide flexibility so we do not have to come back sooner and bring forward the legislation required to put that on a statutory footing for the next year. We will of course have to do that at some point; what we hope is that it will actually be done in Stormont.

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[Tony Lloyd]

I think the Secretary of State is confirming that this is not an emergency and that the procedures to allow everything to be forced through so quickly are not absolutely necessary. The different parts of the Bill—the retrospective definition of what was legal spend and the anticipatory spend for next year—could have been separated. The second most certainly could have been done more slowly. There could have been capacity for much greater and lengthier scrutiny of those processes. That is important. The suspicion about the 70% is that it anticipates that there will not be an Executive or an Assembly back in operation. It allows the situation to ride over and ride over. The concern is that there is no ambition to see the restoration of Stormont.

[Karen Bradley]

I am sorry to intervene on the hon. Gentleman again—he is being very generous with his time—but I just want to be absolutely clear on the record: this has nothing to do with a timetable around the restoration of devolution. It is recognising that last year we were under pressure to introduce, before the summer recess, the Northern Ireland Budget Bill for 2018-19. We did that in July—I think in the last week of July—to put it on a statutory footing, because there was a risk that if we had not done so, some Departments would have run out of the ability to spend money over the summer recess. There would have been no legal basis for spending on schools, hospitals and so on. The reason for the 70% is that, in the absence of Ministers and with additional spending pressures on Departments, I do not want us to be in a position where we are urgently having to take that legislation through here again. I would much rather we gave civil servants the comfort they need. I accept that it is unusual, but I assure the hon. Gentleman that it is nothing to do with the timetable around devolution.

[Tony Lloyd]

I am grateful to the Secretary of State for that assurance.

On a different issue, the Secretary of State’s colleague, the Communities Secretary, made it clear that the stronger towns initiative would extend to Northern Ireland, and hon. Members from across the Chamber will welcome that. However, given that it is a UK Government initiative, it is not clear how the decision-making capacity will be implemented. It is important that people can make decisions. It would be farcical if money were gifted to Northern Ireland—I do not know whether it would be Barnettised—but were not spendable because nobody can made a decision. [Interruption.] I am glad to see that the Secretary of State is considering that proposition.

Some have claimed that the £140 million is new funding that has resulted from the political pressure that Northern Ireland parties have put on central Government, but it is important that I repeat what the Secretary of State has already confirmed. Although it is new funding, and is welcome for that reason, it is actually a result of the lack of opportunity for more fundamental service reconfiguration, as she said. In other words, it is money for failure. The problem with that—the House must look at this very closely—is that my constituents, the Secretary of State’s constituents and the constituents of all Northern Ireland Members are paying for it. That is unacceptable. It is a tariff resulting from the failure of the political process. Once again, we come back to the recognition that, because there is no Stormont Assembly, we are all paying the cost in worse services, financially, and in the erosion of democratic values.

We do not intend to divide the House on budgetary items. It would not be appropriate do so because they give permission to spend or are the legal ratification of spending processes. However, this shakes us all to say that there must now be real effort put in to restoring Stormont. I have never doubted the Secretary of State’s sincerity in wanting to see Stormont restored, but I doubt the Government’s capacity. That is the real issue that divides us. I repeat what I have said previously: if the Prime Minister is so preoccupied with Brexit that she has no time to look at devolution to Northern Ireland, that is a fundamental political mistake that we will rue in time to come. We need ambition. Those talks must take place, and the Government in Dublin must be involved.

Some time ago, when I arranged the British-Irish Intergovernmental Conference with the Secretary of State, she said:

“I remind him that that body has met twice in the past 12 months.” —[Official Report, 13 February 2019; Vol. 654, c. 906.]

That is true, and those occasions were the first in 145 months. That is not acceptable.

[Karen Bradley]

It is worth putting on the record the fact that the last time the British-Irish Intergovernmental Conference had met was in 2007. Clearly, although the institutions were running and Stormont was fully running with full power sharing, the appropriate east-west conversations could happen through other bodies. It is clear that that has happened, but it is a consequence of Stormont’s not operating and there needing to be a forum for east-west communication.

[Tony Lloyd]

As the Secretary of State knows, I have asked for the BIIGC to be convened regularly. Back in the day, it sometimes met three or four times a year, particularly in the days of direct rule, when there was an ambition to get us back to a functioning Stormont. I have asked her in the past when it will meet again. Those meetings need to be timetabled and put on a regular basis so that we know it will meet and continue to be an active partner with the British Government in achieving the ambition of a restored Stormont.

I am aware that I have spoken for some time—I have given way a lot—and although we have the time, as the right hon. Member for Hemel Hempstead reminded me, it is probably time I devoted it to other people.

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[John Penrose]

It was certainly not my intention to cause the hon. Lady to draw breath. The point I was trying to make is that direct rule is potentially extremely dangerous and can lead to a very difficult political situation if we are not all collectively very careful. It is not a step to be taken lightly, simply or frivolously at all.

[Tony Lloyd]

In agreeing with the Minister, it is probably worth pointing out that the last period of direct rule lasted five years. This was the total antithesis of the ambitions of the devolved Administration.

[John Penrose]

I strongly agree and I think there has been pretty much unanimous agreement across the House during this debate about that point.