I beg to move,
That the draft Welfare Reform (Northern Ireland) Order 2015, which was laid before this House on 26 November, be approved.
The order will ensure that the people of Northern Ireland can benefit from the radical programme of welfare reforms enabled by the Welfare Reform Act 2012 in Great Britain. That landmark act ushered in a new welfare contract with the British people. It said to those who are able to work, “Work will always pay.” It said to the most vulnerable in society, “We will continue to provide you with the support you need”, and it said to the taxpayer, “Your hard-earned money will be spent responsibly.”
This new contract reflects principles which continue to guide our welfare reform programme—that work is the best route out of poverty, that spending on welfare should be sustainable, that people on benefits should face the same choices as those in work, and that the most vulnerable should be protected. Those are the principles that underpin the Welfare Reform Act 2012, and they are the principles that underpin the Order in Council before the House today.
Before I turn to the specifics of the order, I want to remind the House of the desperate need for welfare reform in Great Britain and Northern Ireland. When we took office in 2010 nearly 1 in 5 households had no one working, the number of households in which no one had ever worked had nearly doubled, and nearly 1.5 million people had been on benefits for most of the previous decade. The welfare system, with its byzantine complexity and perverse incentives, had allowed people to become detached from the rest of society, trapped in worklessness and dependency.
Over the past five years, we have stuck to our economic plan, delivered welfare reform and seen great progress: employment is up over 2 million; there are over 680,000 fewer workless households; and the number of people claiming the main out-of-work benefits has fallen by 1 million. In Northern Ireland, too, there have been improvements in the labour market, with 33,000 more people in employment than in 2010 and the claimant count down nearly 30% over the same period, but there is still much more to do. Northern Ireland has a lower proportion of its working age population in work than any other country or region of the UK; 130,000 households have no one in work; and 5% of those claiming the main out-of-work benefits across the UK as a whole are in Northern Ireland, which is well above its share of the UK working-age population.
In rebalancing Northern Ireland’s economy to meet the challenges of today’s global economy, we are tackling these challenges and creating jobs. Economic reforms, such as the proposed corporation tax reduction, will be vital, but economic reforms alone will not create a more prosperous society or improve the life chances of people trapped in dependency. As my right hon. Friend the Secretary of State for Work and Pensions has said many times in this House, economic reform must be complemented by social reform. We must ensure that people are supported and incentivised to take advantage of the opportunities that economic growth can create, and that is what the order does.
Improved incentives are at the heart of universal credit. The single taper rate ensures that work will always pay, and the stronger conditionality framework encourages claimants to do everything they reasonably can to find or prepare for work.
The Minister will know that the Belfast agreement created two statutory organisations: the Northern Ireland Human Rights Commission and the Equality Commission for Northern Ireland. What consultation have the Government conducted with them on these welfare reforms?
Full and public consultation has taken place, and all the information has been made available repeatedly.
Early evidence suggests that universal credit is making a difference. Compared to current jobseeker’s allowance claimants, universal credit claimants look for work more, enter work faster and earn more. The benefit cap is also having a positive impact in Great Britain, with capped households 41% more likely to go into work than similar uncapped households. It must be right that the people of Northern Ireland benefit from these reforms, so the order provides the legislative framework to implement them in Northern Ireland, as well as replacing disability living allowance with the personal independence payment, which helps towards additional living costs associated with a long-term health condition or disability and is based on how a person’s condition affects them, not on the condition they have; reforming contributory benefits so that they align with universal credit conditionality, including through the introduction of a claimant commitment as a condition of entitlement; time limiting employment support allowance to underline the principle that with the right support claimants are expected to return to work; and introducing tougher penalties for benefit fraud.
The transitional provisions in the order allow the Secretary of State to exercise the vast majority of regulation-making powers in the first instance, and our intention is to introduce the regulations in the early new year, working with colleagues in Northern Ireland. It will be for the Northern Ireland Executive, however, to implement the changes, and regulations relating to the top-ups outlined in the Stormont House and fresh start agreements will be taken forward by the relevant Northern Ireland Department in the Assembly.
It is important to remember what the order is about and what it is not about. It is not intended to diminish Northern Ireland’s devolution settlement. As my right hon. Friend the Secretary of State for Northern Ireland has made clear, the legislative approach we are taking has arisen at the request of the Northern Ireland parties, and the Assembly has given its consent. The order also reflects the draft Northern Ireland Welfare Reform Bill, which has been debated at great length in the Assembly over the past three years. Accordingly, the order includes a number of amendments that reflect the will of the Assembly, including an 18-month limit for higher level sanctions and discretionary payments.
This order is about building and delivering the fresh start agreement. It is about supporting hard work and aspiration, and creating the right incentives for people to fulfil their potential and create a safe, secure and self-sufficient life, supported by, but independent from, the state. It is about making sure that spending on welfare is sustainable and fair to the taxpayer, while at the same time protecting the most vulnerable. Building an economy based on higher pay, lower taxes and lower welfare is both right for the UK and right for Northern Ireland. I commend the order to the House.
It is important to be mindful throughout today’s debate of the events that have led us to this point. It is now almost a full year since the Stormont House agreement was finalised, after months of negotiation between five Northern Irish political parties, involving representatives of the UK, US and Irish Governments. Those negotiations sought to reach a lasting solution to some of the problems that have afflicted Northern Ireland not just in recent years, but throughout its history. The agreement made a substantial amount of progress on some of the most contentious issues, including flags, parades and dealing with the past, while also seeking a way forward on issues such as welfare reform and the devolution of corporation tax.
The Stormont House agreement marked a turning point, but in the longer term it has not provided a conclusive resolution to most of the issues that the parties sought to address. Divisions have remained in the 12 months since and have escalated at frequent intervals. On more than one occasion this year, it appeared that there was a genuine risk not just that the devolution settlement might collapse, but that we might see a return to direct rule for the first time in almost a decade. Whatever their disagreements, it has always been clear that none of the parties wanted that. Neither, of course, did hon. Members on either side of this Chamber.
My hope is that today marks the end of a difficult process that none of us wants to see repeated. The Northern Ireland (Welfare Reform) Act 2015, which received Royal Assent this week—together with this order, which it enabled—takes an important step towards bringing the events of the last 12 months to a close. I suspect that no one will see this order as a perfect solution. Most will nevertheless regard it as necessary at least, in so far as it paves the way for an end to financial penalties and a return to stable government. The Opposition will not, therefore, be voting against the order today, just as we did not vote against the enabling Bill, which became law last week.
We have serious concerns about many of the Government’s welfare reforms and, as the Minister knows, we have not held back from expressing them at the appropriate time. We have also, however, been consistent in our view that these debates are not the right forum for rehearsing the arguments we have been making elsewhere. We sincerely hope that, in bringing recent disagreements over welfare reform in Northern Ireland to a close, this legislation will mark the beginning of a new chapter in its history. It is hoped by many that it will pave the way for progress on long stalled issues, including the devolution of corporation tax, as I mentioned, as well as a voluntary redundancy scheme to mitigate the impact of recent civil service cuts on Northern Ireland’s workforce.
We particularly welcome the provisions made for transitional protections, extending over a number of years, to help to mitigate the impact of some of the most significant changes. These include important protections for existing claimants affected by the bedroom tax and the transition from disability living allowance to the personal independence payment. I understand that agreement has also been reached for a number of changes to be made to the way that universal credit will be implemented in Northern Ireland, which include exemptions from the requirement for single household payments, provisions to allow the housing costs element to be paid directly to landlords and protections in the sanctions regime for lone parents seeking work.
These are all welcome compromises on the part of the Department for Work and Pensions. Although they may not address all the concerns that have been raised about welfare reform in Northern Ireland, they will nevertheless go some way towards mitigating the impact on some of the most vulnerable among those affected.
The hon. Lady is rightly outlining some of the beneficial mitigating measures that will come into effect in Northern Ireland. As a Member of Parliament in this part of the United Kingdom, does she perhaps look on the package in Northern Ireland with some shades of envy for her own constituents?
I appreciate that some of the compromises that the DUP have reached for Northern Ireland are not outcomes that we have managed to achieve on the mainland. Many of the policies that I see in front of me are certainly things that the Labour party has called for, so I congratulate DUP Members. Let us call a spade a spade. These are all welcome compromises on the DUP’s part. Although they may not address all the concerns, they nevertheless go some way towards mitigating the impacts on some of the most vulnerable among those affected.
We must remember that the divisions that recent negotiations have sought to heal go far beyond welfare reform alone. As such, finalising this agreement will allow progress to be made in other areas, making available additional funding for the Police Service of Northern Ireland to step up its efforts to fight terrorism. There will also be new funding for community initiatives, among them efforts to bring down the peace walls that have historically divided Northern Ireland’s communities. The compromises reached on the part of the DUP helped to get the exceptional circumstances of Northern Ireland recognised. Disagreements no doubt remain, but the settlement reached between Stormont and Westminster nevertheless presents an opportunity to draw a line under the difficult events that we have lived through in recent months.
I rise to speak briefly on this vexed issue because, quite simply, all that has to be said and can be said on the issue has been said. My hon. Friends and I have made our position abundantly clear on many occasions, but I could not let this statutory order pass without expressing my regrets. It is entirely regrettable that the role and responsibility of the Northern Ireland Assembly has been eroded and undermined as it has by the Government, by the DUP and by Sinn Féin.
It is not clear to me whether Sinn Féin and the DUP did not realise the implications of locking into the Welfare Reform and Work Bill in the legislative consent motion, or whether they did not care. That is the situation we are in. It is particularly odd when the DUP actually voted against the Bill in this House, but then signed up to it in the Assembly.
I have listened with some incredulity to what the hon. Gentleman has said. Does he not accept that the Welfare Reform and Work Bill and the agreement for Northern Ireland represent a better deal for Northern Ireland than any other part of the UK has received? Indeed, the Labour party has already indicated its envy of the Northern Ireland deal, so will he not accept the good deal that we have—one that beats anywhere else in the United Kingdom?
The hon. Gentleman makes a very good point. The difficulty about it is that the DUP would have settled for a lot less. DUP Members argued for less time and again. Quite simply, I agree. The SDLP feels that, although the deal has its merits in some places, there are big gaps in it in others. Quite frankly, what we need to ensure is that those gaps are filled.
Does my hon. Friend recall meetings we had with the noble Lord Freud in the other place back in February 2012 and in November 2012, when he indicated to our party delegation that those mitigations were then in place? Does my hon. Friend agree that it took some time for the then Minister for Social Development to come to his senses and realise that those mitigation measures would be in place?
I thank my hon. Friend for her comments. I agree. I recall the meeting she mentions. In my opinion, what she is reflecting is the fact that it was a complex issue and it still is a complex issue. What comes to mind immediately—and I am glad that the hon. Member for Strangford (Jim Shannon) drew my attention to it—is that the negotiation skills of Sinn Féin and the DUP have been very flawed. Quite simply, they were prepared to settle for a very bad deal, and now they are settling for just a bad deal.
I believe that we in the SDLP were right to argue that the Chancellor would have to introduce mitigation in relation to tax credits, and in due course he did, thus making that part of the debate redundant. Indeed, the £60 million top-ups are not only redundant but unnecessary. There must now be a debate about exactly where the money will be reallocated, because that is not clear. The SDLP believes that, instead of carving up poverty, we must establish a clear strategy that will relieve our present situation and enable us to concentrate on prosperity rather than welfare. However, that is a discussion for another time and another place.
Our party has argued for legislation in the Assembly but, failing that, while we have a high regard for the Secretary of State in many respects, we have been honest and open about the fact that, in this instance, we want to curb her influence and the undermining of the spirit of devolution. It is just a pity that Sinn Féin Members are not present to vote either with or against the Conservative Government. I do not know how they would vote on this occasion, but it is disappointing for us that DUP Members are being gung-ho here and voting in favour of these measures.
The hon. Gentleman is an extremely valuable member of the Select Committee. Does he accept that, in the spirit of devolution, which involves a power-sharing rather than a straight democratic arrangement, it is necessary for parties to make compromises? Yes, they can state what they really believe in, but at the end of the day they must make compromises in the spirit of devolution, because failing to do so could risk bringing down the devolution settlement itself. Indeed, that nearly happened.
I fully respect our learned and hon. Friend and the issue that he has raised, but I put it to him that no party has been more willing to compromise on a whole range of issues than the SDLP. We were there at the beginning, we are there in the middle, and we will be there at the end, working to create consensus and partnership.
I want to make it clear that the responsibility for this matter being debated in the House today lies fully with the SDLP and with Sinn Féin—and the Greens: the wee Green man in the Assembly. They used the powers that were available to block the legislation, created a constitutional and financial crisis in the Assembly, and hurt the many hundreds of thousands of people who found that for the last year the budget of the Assembly had been in disarray. The only way out of the impasse that had been created by the SDLP and Sinn Féin was to bring the legislation here. At the end of the day, common sense prevailed, and that is why we are in our present position.
Of course, that £100 million-plus could have been used to deal with many of the pressing problems faced by my hon. Friend’s constituents and mine, and, indeed. the constituents of all of us in the House tonight. They could not benefit from hip operations, eye operations or special needs provision in schools because money had been drained from the Northern Ireland budget unnecessarily. Let us be clear about this. The responsibility for the legislation being brought here rests with those who took the view that they did, even after concessions had been made. I want to thank the Ministers on the Treasury Bench who listened to the special case in Northern Ireland, albeit that they made us pay for the changes ourselves. Nevertheless, they recognised that there were special conditions in Northern Ireland and they were prepared to be flexible. I suspect that caused some difficulty for them with their constituents, because the same arrangements were not available here on the mainland. Nevertheless, they were made available in Northern Ireland—although, as I said, the Northern Ireland Executive had to pay for the changes made.
This was always going to be a difficult issue because of the parity principle. It is one of the reasons why at the very beginning when devolution was being set up we questioned whether welfare should ever be devolved; departure from the parity principle was always going to be very difficult. The arrangement was that, so long as Northern Ireland stayed in line with tax changes and benefit changes in the rest of the UK, through the annually managed expenditure, whatever the cost of welfare would be, it would be met by the Exchequer; it would not have to be found locally, but would be met by the Exchequer. It was perfectly legitimate to say, “We’re not going to allow you to go and do your own thing and then expect the Treasury to pick up the bill.” We expect there to be that parity principle and, that being the case, the devolution of welfare to the Northern Ireland Assembly was always going to create difficulties if parties decided to dig their heels in and ask for radically different arrangements.
It has been mentioned that my party voted against some of the things contained in the Bill at Westminster. That is true, but there are many things we voted for. We supported the benefit cap. We supported the move to universal credit and the simplification of benefit arrangements. We supported the principle that benefits should be set at a level to make work pay, and not to penalise people who went out and worked. We supported all those things, but there were things we were not happy with. We voted against them here. In some cases we were able to negotiate differences in Northern Ireland, and in some cases we were not, but we faced up to the reality that once the legislation had passed through Westminster the Northern Ireland budget was not going to be able to bear the cost of not implementing it in Northern Ireland.
It is ironic, however, that the SDLP should say that Sinn Féin and the DUP rolled over to the Government on welfare reform. Let me give one example. When the hon. Member for South Down (Ms Ritchie) was Minister for Social Development, she put through a lot of statutory instruments that simply reflected welfare changes here and were introduced in Northern Ireland, very often without any debate. Indeed, it was her successor who introduced in Northern Ireland the removal of the spare room subsidy for the private rented sector, and then railed against it when it was introduced for tenants in the public rented sector. There was not a word about it in the Northern Ireland Assembly when her colleague Mr Attwood introduced that. So we can see a certain amount of conflict between the anti-welfare rhetoric of the SDLP and its willingness on many occasions to introduce welfare changes through the Assembly.
Instead of concentrating only on the SDLP, I would be intrigued to find out what persuaded Sinn Féin, after months and months of saying no to welfare reform, to agree with the DUP—and do not tell me it was the charm of the DUP; just explain why they changed their mind.
As I have mentioned to the hon. Lady before, because she has asked me this previously, Sinn Féin has on many occasions adopted an intransigent attitude. It said it would never turn its back on the IRA, but at St Andrews we insisted that it had to turn its back on associations with all those who were involved in criminality before we were—
Mr Deputy Speaker, you have made it clear to the hon. Lady that I would be digressing if I went down that route. The good thing is that Sinn Féin did face up to the reality that we could not go along a route where we did not have a sustainable budget and could not deliver services in Northern Ireland, we were going to hit a constitutional crisis and the devolution settlement was going to be under threat if we did not deal with this issue. I do not see what happened as a cop-out on our part, because we had always advocated that, if this matter could not be dealt with in the Assembly, it should be dealt with here—my only regret was that the Secretary of State did not take the powers earlier. Perhaps it is better that the powers were handed to her by the Northern Ireland Assembly and therefore we have this order tonight.
Does the hon. Gentleman not recall that, when I was Minister for Social Development, I facilitated the request by the Social Development Committee, under the chairmanship of the hon. Member for East Londonderry (Mr Campbell)? He and others asked me whether it would be possible for money to be paid directly to the landlord rather than the tenant as part of housing allowance, in order to ensure the protection of tenants, and I was very glad to do it. Does the hon. Member for East Antrim (Sammy Wilson) also agree that the whole purpose of those statutory instruments was to ensure that money was got to people as quickly as possible, in order to take them out of poverty and into a situation where they had money?
The whole point of the order before us is that it allows for those changes to be made in Northern Ireland. The range of the changes has been highlighted here tonight: the exemption from the spare room subsidy changes; the direct payments to landlords; the split payments to households; and additional funding for those who would be affected by housing benefit changes to their rates. All those have been facilitated as a result of the negotiations that took place—under the auspices of a Democratic Unionist party Minister; the DUP negotiated many of those changes. As I say, we were pleased that the Government were prepared to be flexible, albeit that their largesse did not extend to funding those changes and those had to be funded from the Northern Ireland budget.
The good thing about this order is that it removes something that was toxic in the Assembly. Until December next year, any welfare changes will be done through this House and therefore the kind of impasse that we have experienced before will be removed. That is good for the stability of the Assembly. It is good that we have an order that reflects some of the changes that we believe were necessary and some of the amendments we wish to have in the legislation. Overall, it is a good part of the package. We are not ashamed of it. We do not believe it dilutes devolution. It is a recognition that the current blocking arrangements in the Assembly created problems that we had to find a way around.
I am very grateful to the hon. Gentleman for allowing me to intervene again. I am sure that he would like to correct the record. Instead of describing an Assembly Member as a “little Green man”, perhaps he could explain that that Member of the Legislative Assembly is in fact a member of the Green party, and one of the six MLAs in North Down. I am sure that he would like to correct the record.
The MLA is a man. He is quite small, and he sits in the corner of the Assembly, and he is also a member of the Green party. Members can take from that what they wish. He and I have a long record of conflict in the Assembly.
I welcome the order before us tonight. There is other welfare legislation that will have to come before this House. I look forward to it going through, so that the problems that welfare was causing in the Northern Ireland Assembly should not cause an impasse in the future.
Tonight we are dealing with the Welfare Reform (Northern Ireland) Order, which implements provisions contained in the Welfare Reform Act 2012. Specific changes include top-up powers and a different sanctions regime.
Unfortunately, owing to the actions of the Democratic Unionist party and Sinn Féin, we see the surrender and return of these welfare reform powers to Westminster, and the reintroduction of the undemocratic Orders in Council, which we thought we had consigned to the legislative dustbin when devolution returned on 7 May 2007. Orders in Council are undemocratic, because no provision is made to allow amendments. I do not think that anyone would deny that.
As Members are aware, last week the SDLP tabled a number of amendments to the enabling Bill at Committee stage which dealt with the detail of this Order. Although I do not intend to reiterate our rationale, I will say this: the amendments would have restricted the Secretary of State’s powers to interfere with Northern Ireland’s welfare system.
On one amendment in particular, namely the sunset clause, the Secretary of State for Northern Ireland and the Minister made no attempt to justify voting it down. That sunset clause was set at 31 December 2016—
If the hon. Gentleman will let me complete my point, I will come back to him.
There was no response to the point made by my hon. Friend the Member for Foyle (Mark Durkan) when he asked why the sunset clause should not be made more temporary, and set at 1 June 2016. That would have reflected the new mandate following the elections in May. The arbitrary date seems to have been chosen more for neatness than for any consideration of the processes and structures in the Assembly.
I have the greatest respect for the hon. Lady. I wish to give her an opportunity to express her regrets—or does she, along with her party, in fact express any regrets?—that £100 million was sent back to the Treasury, which could have been used for the benefit of the people of Northern Ireland. Will she express that regret?
On that point, I can well recall that there was robust opposition to those fines by my colleagues in the Assembly. Let me ask the hon. Gentleman this: do he and his colleagues regret the fact that there was an in-and-out approach to ministerial office by the DUP back in September, which resulted in very long waiting lists for health and in many people still having to wait for surgical procedures?
This debate and this order reflect the Government’s attitude and the disregard for the Assembly’s democratic processes on the part of the Government and Sinn Féin and the DUP. This sunset clause has been presented by other parties as the cut-off point in the Secretary of State’s interference in our welfare system, but of course that is not the case. The legislative consent motion voted through by the DUP and Sinn Féin locks Northern Ireland into the welfare provisions.
May I remind you, Mr Deputy Speaker, that DUP Members walked through the Lobby with us to vote against the provisions, yet they have joined Sinn Féin in signing up to this? My colleague in the Assembly, Mr Attwood, received a letter from the DUP Minister for Social Development last week, confirming that our constituents would face a benefit freeze for four years up to 2020 and that Westminster would have the power to impose an even lower benefit cap—lower than £20,000 for the North. That is what the DUP and Sinn Féin have locked us into. Such a four-year freeze will mean real reductions year on year for people on income support, jobseeker’s allowance, employment and support allowance and universal credit. It will mean a freeze for constituents, whether those of my hon. Friend the Member for Foyle (Mark Durkan), of the hon. Members for East Derry (Mr Campbell), for East Antrim (Sammy Wilson) or for Upper Bann (David Simpson), or of the right hon. Member for Belfast North (Mr Dodds).
Does the hon. Lady accept that most people in Northern Ireland do not regard a benefit freeze on the scale that she suggests, which is equivalent to take-home pay of £37,000 for someone in work, as unreasonable, and that if we are talking about making work pay, such a benefit freeze is essential?
May I suggest to the hon. Gentleman that the standard of living in Northern Ireland is much higher and that we are talking about a benefit cap. I remind the hon. Member for East Antrim not to lead people in a slightly different direction by confusing a freeze with a benefit cap. The debate on this Order in Council, which has 140 clauses, is really about the needs of families and individuals who need to access the benefits system. People do not do that because they want to; they are forced into it because they cannot find a job, have lost their job or they live in an area where there have been considerable job losses. In Ballymena, in the constituency of the hon. Member for North Antrim (Ian Paisley), there will be considerable job losses as a result of closures at Michelin.
We are all united in a desire to build a more united society where there will no longer be peace walls, and we have a stable economy with plenty of economic growth and productivity and stable political institutions. We want to ensure that we can live, and people with families can rear them, in relative comfort. It is not a lifestyle choice to be in receipt of benefits; as I explained, many people are forced into such circumstances because they do not have a job or they have some form of disability.
I would like the Minister responding on behalf of the Department for Work and Pensions to explain the calculation of the top-ups and which budget they will come from. Will they come out of the existing Department for Social Development budget or the Social Security Agency budget, or will there be a raid on the discretionary fund, which will disadvantage other people?
I take on board the fact that there is a top-up regime, and I hope that that money will be safeguarded by the Treasury to ensure that money flows to people. We do not want to see a sanctions regime lead to youth homelessness, which has been an emerging phenomenon in Germany and here in England and Wales, where benefits sanctions are in operation. Such sanctions can often bear down on the individuals and families least financially able to tolerate them. None of us, no matter what our political perspective or affiliation, would want that to happen to any of our constituents.
In conclusion, I would like to touch on a rather bizarre criticism levelled at my colleagues by hon. Members representing the DUP. They suggested that there was some contradiction in our argument that Northern Ireland’s welfare powers should be legislated for in Northern Ireland and, in the absence of that, our attempt to protect claimants through our amendment put to this House last week. There is no contradiction. We believe in democracy and in the processes of both the Northern Ireland Assembly and this House to scrutinise and amend legislation. Just because the DUP and Sinn Féin undermined the processes of the Northern Ireland Assembly, the SDLP will not undermine the role, duty and responsibility of this Chamber.
To my knowledge, Sinn Féin has been oddly quiet on this issue. Its only response to the trade unions protesting outside its offices on the issue at the weekend was that it supported the unions in
“directing united opposition against the Tory government in London”—
by handing over powers to that same Tory Government. That is rather bizarre and ludicrous.
The most important thing is that we are able to build on the political institutions and on sound economic growth and productivity in a balanced way throughout Northern Ireland, and that people are not worse off as a result of this measure—that is, people who are forced into the benefits system because of a lack of opportunity and jobs.
I shall contribute briefly to the debate. I welcome what the hon. Member for South Down (Ms Ritchie) said about wanting to move Northern Ireland forward, building the economy and creating peace and stability in Northern Ireland. We have common cause in that. That is precisely why we believe that the fresh start agreement, including this welfare element, is so important. Without it, Northern Ireland would have gone backwards. We would, in effect, have gone back to direct rule. It would have taken many years once again to get devolution up and running, with all that would result from that.
There is no point adopting the self-indulgent, luxurious position of wishing that circumstances were different. That is the fact of the matter. We had to address a very difficult situation. The rule of parity was implemented by Ministers when I first because Social Development Minister back in 1999. I remember that the first thing we discussed with the civil servants was the issue of parity. Revisiting this point, it is interesting to note that it is cited specifically in the Belfast agreement, which the SDLP was instrumental in agreeing. That principle is enshrined in section 87 of the Northern Ireland Act 1998. Parity is important. Without maintaining parity, the Northern Ireland Executive can make changes. The Northern Ireland Assembly can depart from legislation and provisions passed here, but on the principle that any additional costs would fall to be met by the Northern Ireland Executive out of the block grant. To close our eyes to that reality and pretend that things are otherwise and wish them so is simply not sensible, rational politics.
We faced up to the issue. As my hon. Friend the Member for East Antrim (Sammy Wilson) eloquently set out, we voted against but we also clearly supported some elements because we believed that they were best for the Government’s welfare agenda. We opposed others and then made a strong effort in the Assembly and in direct negotiation. I pay tribute to Nelson McCausland, the previous Department for Social Development Minister, for getting mitigations, which the Government accepted. We then put those forward in the Assembly. The Bill was first introduced in October 2012 and reached its final stage in May 2015. It still did not get through because of SDLP, Sinn Fein and Green party opposition.
The process is not undemocratic; remember that the Northern Ireland Assembly passed a legislative consent motion on 18 November by 70 votes to 22. The principle of devolution has been observed and the integrity of the Northern Ireland Assembly’s right to legislate has been specifically preserved. The Assembly has given its consent through that motion.
Finally, I want to put on the record the improvements and additions that Northern Ireland now has compared with elsewhere. There are the top-ups, which amount to many hundreds of millions of pounds, and the exclusion of the so-called bedroom tax. As has been outlined, we have seen the end of fines. I will not go into the figures, but those fines were having a detrimental effect on ordinary people and services in Northern Ireland and we have put a stop to them. Given their previous attitude, if the SDLP and Sinn Fein had had their way, they would continue.
We are also getting £25 million of new ring-fenced funding per year for five years to address welfare error and fraud in Northern Ireland. The UK Government have agreed that half of any savings generated in the next five years can be reinvested by the Northern Ireland Executive. Those are just some of the improvements on the welfare side as well as all the other advantages from the fresh start agreement, building on the Stormont House agreement.
We would prefer the legislation to have gone through the Assembly—of course we would. However, we faced up to the reality: if we had gone on the way we were, we would have ended up making suffer those we most wanted to protect.
I am not arguing against the legislation by any means, but I seek clarification. The top-ups available under the disability living allowance and the personal independence payment through the Stormont House agreement are not available under these proposals—instead, they are down to the three-person panel. This is just a matter of clarity. Obviously, Sinn Fein has a different perspective from that of Stormont House.
As I understand it, the Executive are establishing a small working group under the leadership of Professor Eileen Evason to bring forward proposals within the financial envelope set out by the Executive, including administrative costs, to maximise the use of additional resources. The issue will be for the Executive to determine following Professor Evason’s recommendations.
I thank the Government for the expeditious way in which they have brought this matter through the House of Commons at the request of the Northern Ireland Assembly. This is a good day for Northern Ireland, and I certainly support this legislation.
I have to start by disagreeing with the very last point made by the right hon. Member for Belfast North (Mr Dodds). I am not here to thank the Government for introducing, by a direct-rule-style Order in Council, legislation that I opposed. The Democratic Unionist party may be happy to endorse by fiat direct rule legislation, parts of which they supposedly opposed; earlier, the hon. Member for East Antrim (Sammy Wilson) was honest enough to concede that his party had supported parts of the original legislation in 2011 and 2012.
I want to correct the misrecord that has come from some of the hon. Members behind me. Whenever the legislation was going through, we, as part of due diligence, were trying to get the Assembly to address properly and anticipate the implications of the legislation that passed through this House, precisely to make sure that we could mitigate and influence it and anticipate what mitigation measures and top-ups were needed to maximise whatever bit of discretion devolution could give us. DUP Members voted the proposal down in the Northern Ireland Assembly. They said that we were scaremongering. They said, “Leave it till we see how the legislation comes through and then our Minister will be able to negotiate some mitigation.” The mitigation that their Minister produced—we have heard Members repeat it tonight—was basically the same mitigation that Lord Freud told us in February 2012 would be available, so no additional concessions were got.
We wanted additional concessions. We said in the Assembly that concessions were available and that we needed to advance further mitigation, but DUP Members stalled. Yet now they make a virtue out of saying that their Minister manfully negotiated and pulled a rabbit out of a hat on concessions that were available all along anyway.
That is a dereliction on the part of DUP Members, because they did not get anything that was not already available in February 2012. We put it on the record that it was available then, and we could and should have got more if the Assembly had combined in that effort. DUP Members decided that they had sufficient confidence in the legislation that was being put through by the coalition Government here and in themselves not to create an all-party approach. An all-party approach should always have been created. I previously understood that Sinn Féin believed in such an all-party approach, but of course that tune has changed several times in the course of this whole exercise.
Let us be very clear about the content of the order: it gives effect to the 2012 Act. It basically introduces the Northern Ireland version of the 2012 Act with tweaks and adjustments, some of which were always going to be available anyway. When we first said that we were getting these concessions in 2012, the DUP said that we were scaremongering about the Bill and that we did not need to be looking to concessions. [Interruption.] The hon. Member for Strangford (Jim Shannon) is chuntering away, not content with making his usual intervention; he is apparently the only Member of this House who would intervene on himself. Let us be very clear: we are told here that these concessions were got by the DUP, and at home that they were got by Sinn Féin. We have to ask, “Where are the additional concessions beyond those that Lord Freud told us were available in February?”
Does my hon. Friend well recall the meeting with Lord Freud in February 2012 at which he stated quite clearly that these, shall we say, mitigations would include a slightly different sanctions regime and the ability for welfare payments to be paid to claimants fortnightly rather than monthly? Does he agree that those sanctions were agreed at that time and there was perhaps an unwillingness by the DUP to bring them forward through the welfare reform legislation in the Assembly?
I fully concur with my hon. Friend’s memory of that meeting. Let us be clear, because we dealt with this in the previous debate as well: at the time, the DUP Minister indicated that the computer system would easily facilitate fortnightly payments, or even weekly if it came to that, and that continuing direct payments to the landlord would not be a problem. He also said that the first time he had heard about Northern Ireland’s particular issue with the bedroom tax was from us, and that his officials had not had it raised in any of their meetings with the Department for Social Development. Of course, at that stage he had had no meetings with the DSD Minister and had none planned. When we consider who was doing due diligence in relation to staking out these issues and seeking these concessions, we should remember that that was the situation.
I will answer the right hon. Gentleman’s question: I think it is a worse deal. We not only have this order to transpose the 2012 Act—all the parties in Northern Ireland said they had difficulties with that legislation—but the way in which this is being taken forward means that the Government in Whitehall now have the power, by order, to transpose the Welfare Reform and Work Bill currently going through Parliament. That needs to be understood, because the legislative consent motion passed by the Assembly endorsed all the welfare clauses of the current Bill, as originally tabled. DUP MLAs voted to endorse all the clauses, even though they had voted for amendments to delete some of them or to insert additional clauses. Within a period of weeks, they voted with an entirely different attitude in relation to the Welfare Reform and Work Bill, hiding behind direct rule. I therefore think that the deal is worse.
We must remember that the order will not only have the immediate effect of transposing most of the 2012 Act as implemented in Great Britain, but also provides a power, simply by virtue of regulations, to change a lot of the terms and conditions of the benefits, and can almost disappear some categories of benefits in the 2012 Act. In essence, we are being signed up to that without so much as a provision stating that when this direct-rule power is exercised, there must still be a legislative consent motion in the Assembly. We have been treated to the fiction that while we have direct rule, we have not lost any devolution because all the powers still exist on paper in the Assembly. That means it will supposedly be entirely in order for MLAs to table motions in the Assembly to amend such areas or to come up with their own private Members’ Bills, so we will have the nonsense of parallel, competing legislative strands. That is the sort of fiction and nonsense to which we are being treated.
Let us be very clear that the problem does not relate to the political or legislative processes; the real problem is the potential impact on people whose benefits and living standards will be affected as a result. Let us remember that when the Welfare Reform and Work Bill goes through—it has now been endorsed by a legislative consent motion—it will change the limited work capability element of universal credit for new claimants from April 2017. It is quite clear that although the decision-making power, which the Secretary of State has under the enabling legislation that went through over a week ago, will end in 2016, the effect of the decisions made under that power will not die with the power. The changes in relation to the limited work capability element of universal credit for new claimants will come in, meaning a reduction in the value of current payments of almost £30 a week—from £102.15 to £73.10. That is why all the health charities and disability campaign groups are so opposed to clauses 13 and 14 of the Welfare Reform and Work Bill. Unfortunately, Northern Ireland is now sealed into that by virtue of the legislative consent motion and the measure previously passed by Parliament.
There will be a similar reduction in the amount paid to those in the employment and support allowance work-related activity group. We know from hon. Members representing constituencies in Great Britain that that is one of the notorious vexations. We have heard about just how the work-related activity group has been treated in practice, and about some of the bizarre interpretations, decisions and procedures that people have had to go through. We are now locked into a lot of that courtesy of both the legislative consent motion and this order. We do not have reason to be happy if we take seriously what our friends in all parties across the House are saying in raising their valid concerns. That also goes for some aspects of the sanctions. The time limit on the sanctions is different, courtesy of the efforts that we all made in relation to Stormont House.
I want to make it quite clear that we were signed up for Stormont House in December 2014, because the terms of the agreement stated that the proposals would be developed and brought to the Assembly. When the Bill was brought to the Assembly, however, nothing in it had changed. That is why we tabled a series of modest amendments, which would not have shattered the Stormont House agreement in any way, and which the British Government confirmed would not have stretched or undermined their understanding of what was operable under the agreement. But no, the DUP decided to veto the proposals and, on top of that, Sinn Féin decided to vote down the amendments even though the Tories had voted down similar amendments here in the original 2012 legislation. So those were the people who decided that we were not going to take Stormont House forward on an all-party basis, as had been agreed. I want to put this on record, because I do not think that enough people have understood what happened.
I will make one concession to the Government. A lot of the wriggle room that we had in the Stormont House agreement came about as a result not only of the top-up mitigations from the Executive’s own budget but of the understanding that the Department for Work and Pensions and the Treasury were going to allow the Social Security Agency in Northern Ireland a certain amount of leeway in the interpretation and operation of some of the measures. That is one reason why the big money that it was thought would be needed to make good some of Sinn Féin’s demands was not actually needed after all. The funds did not need to come out of the Executive’s budget because of that leeway being allowed.
However, some of us recognised that the arrangement was time-limited. We were worried that the effects of the welfare cap—which is not to be confused with the benefit cap—would, over time, squeeze and reduce that comfort. We said that we had to be honest about that. The SDLP was also very clear about saying at Stormont House that we had to be up front and public about the fact that, when the next wave of cuts came, we would not be in a position to say that they could be sustained out of the Executive’s budget and that we could not make a claim on the block grant to try to make good those claims. We said that we had to say that up front so that people understood it. Sinn Féin did not want to acknowledge that fact because it was still locked into the pretence that it could say it was protecting all existing claimants and all future claimants for ever more, amen. We never joined in that pretence, but no other party joined us in making that candid declaration that we could not constantly find more and more hard shoulder to run on.
That brings me to the points that were made earlier about the fines. We were asked whether we regretted the fines. We resented those fines, those penalties, those levies, those savings forgone. We have been told by the Secretary of State that they are not fines but savings forgone. I notice that the right hon. Lady did not contradict DUP Members when they were calling them fines; it is only me who gets contradicted. Whatever they are called, we resented them because they were an exercise in budget bullying. The DUP never objected to that budget bullying; indeed, one might think that they were actually in on the tactic, and in on the threat about not renewing the computer system.
The fact is that the Assembly was being bullied. I have said before that I do not believe that the Treasury will treat the new suite of devolved capacities for Scotland in relation to welfare reform in this way. I know that Scotland’s deal on welfare is not perfect. Its operation will be problematic, but I am pretty sure that the Treasury will not resort to the kind of tactics that it used against the Northern Ireland Assembly when it comes to dealing with clear differences of view between the Scottish Parliament and the Westminster Government. I believe that it will take a different course.
If we are to be honest about this issue, we must be clear that there is a need to consider whether we need to realign the devolution of welfare in future so that the situation is sustainable. When the sunset clause in this legislation kicks in, and if there is some other mid-term welfare reform package in this Parliament, we do not want the Assembly to spasm into crisis for exactly the same reason.
We said at Stormont House and elsewhere that perhaps we should realign towards something more akin to the Scottish model of devolution. In Scotland, the burden is to take an interest in the benefits that people rely on if they have disabilities and long-term conditions. That points towards a way that we could go that would allow us to be more complete in the protections that we say we are offering people and perhaps provide a more sustainable course for the future.
That answers the point that the hon. Member for East Antrim (Sammy Wilson) made about the architecture of the Good Friday agreement and devolution in the first place. There might be a need to look at realignment, as we have declared. Indeed, I declared that a number of years ago. However, we have not had any takers at any of the talks. If people want to do that, they will find that it could go ahead.
The way in which the implications of this order and the orders to follow are being sold is wrong. Remember that this is only the first of a number of orders that we will get, courtesy of direct rule. Indeed, it is more direct direct rule than we had before, because when a lot of the Northern Ireland social security legislation was passed under the old style of direct rule, it was taken through the House by Northern Ireland Office Ministers. Now, we have direct rule by the DWP, thanks to the way in which Sinn Féin and the DUP have decided it will happen.
It is wrong for parties that oppose these changes to benefits and sanctions to say in respect of making sure that these cuts and changes will happen by direct fiat and by the hand of a direct-rule Minister in the DWP, “Well, that was a good deal because we saved devolution.” Who was threatening devolution? The only parties that were threatening devolution and the institutions were Sinn Féin and the DUP. They contrived the brink and we all had to teeter on it. When they were saved from themselves in the end, they said that they had done a good job by getting concessions that were available anyway—they were not concessions at all.
That is the nonsense and dishonesty that lies at the centre of the politics of this. We are not one bit happy or content. We are not thankful to the Government for this at all. There were ways of dealing with these issues. They should have been taken in a mature way by devolution—
They should have been taken in a mature way by devolution, using the Assembly to anticipate when the legislation which has come through here—[Interruption.] The hon. Member for East Antrim is one of the people who said that we did not need to worry about the implications of the Welfare Reform Bill when it was here in 2011. He said that we were scaremongering and he voted down moves to deal with the issue in the Assembly. Now he is saying that we should be happy with what direct rule will do over the next 13 months. That will have an effect on benefits and people’s living standards for a long time to come, not least people with disabilities and long-term health conditions.
Those people are not just worried about the implications of the Welfare Reform (Northern Ireland) Act 2015 and dissatisfied about the arrangements for personal independence payment, which need to be improved on the basis of the experience in the pilot areas in England, but they are also very concerned about the implications of the Welfare Reform and Work Bill, which will change a lot of the terms and conditions attaching to universal credit. The very basis on which the original 2012 Act was sold here and the very basis on which the DUP tried to retail that Act in the Assembly was the prospectus for universal credit. Already, those terms and conditions are being changed adversely. As we pass this order, other legislation is coming through that will fundamentally change them. That is not a good deal for the people who are on these benefits.
Question put and agreed to.
That the draft Welfare Reform (Northern Ireland) Order 2015, which was laid before this House on 26 November, be approved.