Skip to main content

Northern Ireland Executive (Financial Position)

Volume 602: debated on Wednesday 25 November 2015

1. What steps she is taking to ensure that the Northern Ireland Executive’s financial position is sustainable. (902242)

9. What steps she is taking to ensure that the Northern Ireland Executive’s financial position is sustainable. (902250)

It is for the Executive to deliver a balanced budget and sustainable finances. The Stormont House agreement and last week’s fresh start agreement set out a range of measures to help them deliver that. These include implementation of welfare reform, measures to improve efficiency in the public sector and a new independent fiscal council for Northern Ireland.

Following the welcome agreement between Northern Ireland parties and the British and Irish Governments last week, how confident is the Secretary of State that the Executive’s budget can be put on a sustainable footing, allowing a greater focus on value for money and public service delivery?

I am confident about those matters. Earlier this week, the House passed the welfare reform proposals needed to apply welfare reform in Northern Ireland, which will make a huge difference to financial sustainability, and which also made progress in the House of Lords yesterday.

Given that the Conservative party has come late in the day to the merits of devolution, what assessment has the Secretary of State made of devolving income tax to the Northern Ireland Executive as a means of putting them on a sure financial footing?

The Conservative party is a strong supporter of devolution. Previous agreements with the Northern Ireland Executive make it clear that we are open to considering the devolution of further tax powers, but the Executive’s highest priority is the devolution of corporation tax, which we hope to press ahead with as soon as the Stormont House agreement conditions on financial sustainability are met.

The petition of concern advice in the fresh start agreement is not compulsory or binding on all parties, but does the Secretary of State agree that adherence to it will be important in enabling the Assembly to function properly and set a budget in a timely manner next year?

My hon. Friend puts his points well. I agree that it is important that petitions of concern are focused on those matters for which they were devised—where individual parts of the community need to be protected on equalities issues—and I believe that the protocol agreed under the fresh start agreement will help to focus them on matters for which they were always intended.

It is important that the agreement puts Northern Ireland’s finances on a sustainable footing. What steps will the Secretary of State take to make sure it lasts over the longer term?

One of the most important things that the UK Government are doing to ensure sustainable public finances for the Northern Ireland Executive is implementing our long-term economic plan to deliver economic stability and prosperity. The Northern Ireland economy is growing, and these measures will help to support the Executive in their efforts to ensure that there are sustainable public finances.

Does the Secretary of State agree that without the fresh start agreement there would be no prospect whatsoever of a sustainable budget for the Northern Ireland Executive, which would lead inexorably to the return of direct rule, which would be bad for Northern Ireland and all its people? Does she also agree that the agreement provides for the most generous welfare system in the UK, provides help for hard-working families and sets a date for lowering corporation tax, which will help to create jobs and boost employment?

I can agree with all of that. I have made it clear that without the successful outcome of the talks and the fresh start agreement, we would have been on an inexorable path to the collapse of the institutions and a return to direct rule. I wholeheartedly agree that that would have been a major setback, and one that everyone in the House has striven to avoid.

Following the fresh start agreement, will the Secretary of State now talk to her Cabinet colleagues, particularly the Chancellor, about how, along with the Northern Ireland Executive, we can link Northern Ireland in with the northern powerhouse, to our mutual benefit?

That is a very good idea to consider, and I will certainly raise it with the Chancellor. The proposals in the economic pact agreed between the Executive and the Government a couple of years ago demonstrate that the two Administrations are working more closely together than ever before, but including a northern powerhouse element is a good idea.

Once again, I commend the Secretary of State for her work over the past few months, ensuring with all the parties that Stormont continues. As she knows, the bedroom tax and various other sanctions will not be imposed in Northern Ireland, which, for historical reasons, has a higher welfare spend than elsewhere in the UK. This will place a heavier burden on Northern Ireland than elsewhere. What plans do the Government have in place to back up the Northern Ireland Government should they struggle to fulfil these commitments?

A reasonable compromise was reached in the two agreements between the parties and the UK and the Irish Governments that welfare reform would be implemented with certain top-ups agreed. As we have heard this morning, that gives Northern Ireland the most generous welfare system in the United Kingdom. Although we will not pay for a more expensive welfare system in Northern Ireland than elsewhere, the block grant gives a public spending per head rate in Northern Ireland that is higher than anywhere else in the UK. That provides support for Northern Ireland.

Does the Secretary of State agree with me that Northern Ireland’s financial position cannot ever be sustainable or confident without a major prosperity strategy and an economic development plan that deal with the low skills, low pay and low productivity levels that we have?

I agree that a strategy on prosperity is crucial in Northern Ireland just as it is everywhere else. That is why we are pursuing our long-term economic plan and why the Executive are working hard to make Northern Ireland a fantastic place in which to do business. Recent examples of new jobs announcements are 800 jobs in Enniskillen from Teleperformance; 250 in Belfast from Intelling; and 87 in Ballymoney from McAuley Precision and McAuley Fabrication. The Northern Ireland economy is a great success story, and I think the Executive should take pride in the role they have played in that.