I beg to move,
That the draft Welfare Reform and Work (Northern Ireland) Order 2016, which was laid before this House on 6 July, be approved.
The order will ensure that the welfare reforms enabled by the Welfare Reform and Work Act 2016 in Great Britain are delivered in Northern Ireland while also ensuring that the Northern Ireland Executive have a workable budget. This order is an important part of delivering the “Fresh Start” agreement and will enable the Northern Ireland Executive to provide for supplementary welfare payments from within their own budget. Before the “Fresh Start” agreement, the impasse on agreeing the implementation of welfare reform meant that the Northern Ireland Executive had been operating on an unworkable budget. This had created significant political instability and it risked collapsing the devolution settlement.
This order today brings changes that will help to ensure that the budget of the Northern Ireland Executive is placed on a stable footing. We want to work with the Executive to support a Northern Ireland where politics works—a Northern Ireland with a stronger economy and a stronger, secure and united society. It is in the light of these goals that the Government have agreed to legislate on behalf of the Executive to enable the welfare reform changes in the Welfare Reform Act 2012 and the Welfare Reform and Work Act 2016 to be implemented. Those changes include the introduction of universal credit, personal independence payments and the benefit cap. This formed an integral part of the “Fresh Start” agreement in November last year.
The Welfare Reform (Northern Ireland) Order passed in December last year has enabled the making of more than 30 sets of regulations replicating in Northern Ireland the welfare reforms in the 2012 Act. The order before the House today is the next step in that process. It has been drafted with the full consent and collaboration of the Northern Ireland Executive to bring social security in Northern Ireland back to a position of parity, thereby helping to rebalance and strengthen the finances of the Executive.
Across the UK, our welfare reforms have focused on supporting people to find and keep work. They have focused on employment, fairness and affordability while supporting the vulnerable. Over the past six years, we have stuck to our economic plan, delivered welfare reform and seen great progress, with employment up 2.7 million. Broadening life chances is a central part of this Government’s plans. In Northern Ireland, the raising of tax thresholds will take 110,000 of the lowest paid people out of income tax altogether, and 700,000 people will benefit from reduced taxes. Also, 100,000 people in Northern Ireland are projected to benefit from the national living wage by 2020. The Government’s support for working people goes hand in hand with the welfare reform programme to encourage people into work.
We have also invested in Northern Ireland. The Stormont House and “Fresh Start” agreements included financial packages of £2.5 billion to support investment and reform. This includes £350 million of additional capital borrowing explicitly for economic development projects. By working together, the Government and the Executive have achieved significant successes, including bringing £60 million of additional finance to Northern Ireland businesses, providing additional borrowing for shared education projects and boosting green investment by £70 million.
In Northern Ireland, 55,000 more people are in employment than in 2010, but there is much more still to be done. The most recent Northern Ireland unemployment rate of 5.6% is above the overall UK average of 4.9%. The percentage of unemployed people who have been out of work for more than a year is 47.8%—markedly higher than the UK average of 27%. Some 22% of working-age households in Northern Ireland are workless compared with 15% in the UK as a whole.
The Welfare Reform and Work Act 2016 built on the 2012 reforms, and this order provides the legislative framework to replicate some of its most important aspects, including changes such as improving fairness in the welfare system by changing the level of the benefit the cap. The order will ensure parity by bringing the cap that exists in Great Britain to Northern Ireland. Changes also include providing new funding for additional support to help employment and support allowance and universal credit claimants with health conditions and disabilities into work and removing the ESA work-related activity component, so that the right support and incentives are in place for those who are able to take steps back to work. The unsustainable rise in benefit levels compared with earnings will be corrected by freezing most working-age benefits. Importantly, the changes will help to ensure that the budget of the Northern Ireland Executive is placed on a stable footing.
It was agreed in the “Fresh Start” agreement that the Executive could supplement benefits from within their own budget. The agreement allocated up to £585 million of the Executive’s block grant over four years to provide for supplementary welfare payments in Northern Ireland, and that will be reviewed in three years. Under the 2015 order, the Assembly has already passed some regulations for supplementary welfare payments relating to the 2012 reforms. The provisions of this order will give the Assembly the ability to design and pass further such regulations, including supplementary payments to those affected by the removal of the spare room subsidy. These time-limited payments follow the recommendations of the Evason report, which flowed from a commitment in the “Fresh Start” agreement.
The order is about delivering the “Fresh Start” agreement and returning Northern Ireland to a position of legislative parity and financial stability, and I commend it to the House.
I thank the Minister for bringing this order to the House, but it is a shame that the matter could not have been resolved in Northern Ireland. The order is the result of months of negotiations and an attempt to break budgetary deadlock and avoid the potential collapse of the Stormont institutions. I and many hon. Members were glad to see a deal reached and credit the work of all those involved: the parties in Northern Ireland, the Irish Government and many Members of this House.
I have been involved in Northern Ireland affairs for almost 30 years—within the trade union movement, as a member of the Northern Ireland Affairs Committee, and latterly as a vice-chair of the British-Irish Parliamentary Assembly. In the union work in which I was involved in the 1990s, when we worked hard to deliver the peace process, we coined the phrase, “We are a non-partisan agent for change.” It is that phrase that has guided my work inside and outside this House, and it is with that attitude that I want to address the matter before us today.
The Labour party takes great pride in the role it played in bringing about peace in Northern Ireland, working with good people on the ground and around the world on the Good Friday agreement, the “Fresh Start” agreement and much in between. We have always worked in the best interests of the people of Northern Ireland. What is paramount today is ongoing peace and stability in Northern Ireland, and Labour will work with the Government and all interested parties both in this House and in Northern Ireland on maintaining it. I am sure that that sentiment will be echoed by Members in the House today.
The “Fresh Start” agreement included legislative consent from the Northern Ireland Assembly to allow Parliament to enact legislation on its behalf. I respect the legitimacy of the Assembly to do that, but I am sad that it had to. Today’s order seeks to extend, among other measures, the welfare reform Acts of 2012 and 2016 to Northern Ireland. The Government’s welfare reform programme has devastated the lives of far too many vulnerable people across Great Britain, plunging them into financial distress. In the hour before this debate, we heard about the tax credit fiasco. Real people are suffering as a result of measures brought in by this Government over the past six years. I and many other Members from across the country see the effects of the cuts in our constituency surgeries.
This legislation is in the interests of ongoing stability in Northern Ireland, so we will not stand in its way, but the Labour party will never stop showing its ongoing opposition to the Tory austerity agenda, which we have consistently railed against in this House over recent years. We have opposed cuts to tax credits that hit families in the pocket, changes to ESA that hurt those suffering from disease and injury, a benefits caps that does not rise with inflation, cuts to council tax credits, and cuts to crisis loans. We must also never forget that 42% of those deemed fit for work by Atos were actually declared unfit on appeal—a damning indictment of the Conservative party. I could go on and on.
Welfare reform was intended by this Government to impact hard on the UK’s most vulnerable people and to force them to work when they are not well equipped to do so. The desire to inflict on the people of Northern Ireland the same disastrous policy that has blighted the lives of so many of our constituents right across Great Britain is a desperate tactic from a Government more concerned with ideology than compassion. The use of austerity as a weapon of policy was and still is a crude and blunt instrument. The role of austerity in the now hardly mentioned long-term economic plan will be the epitaph of our dear departed friend from Witney and his sidekick from Tatton. Saying “We will make work pay” rings hollow for those forced to look for work while struggling with long-term illness, injury or disease. The truth is that this Government want to make it impossible for anyone to survive on benefits, which is hugely unfair to those struggling from day to day through no fault of their own.
There may be some who say that the changes should apply to Northern Ireland because they apply across the rest of Great Britain, but, to put it simply, two wrongs do not make a right. The Conservative party clearly believes in the equalisation of misery. Labour believes in the alleviation of misery. When we get back into power, we will not be attacking the sick, the young, the elderly and the disabled or calling them scroungers and skivers. We will not be declaring war on anyone whose curtains are not open by a specific time every day. We will not be making the poor pay for the failings of the rich and those who dabble in money markets. It is interesting that the “Fresh Start” agreement includes measures to mitigate the ongoing austerity regime. While I welcome such measures, does that not show that these changes should not be made in the first place? It is accepted that problems are going to be piled on people who do not deserve them.
We have been advised that the cuts will take £750 million out of the Northern Ireland economy and that the loss per working age adult, at £650 per year, is 38% higher than the UK average. In Northern Ireland, it was recently announced that the Michelin factory in Ballymena will close, resulting in the loss of 860 jobs, that another 250 jobs will be cut in the Caterpillar factory in Newtownabbey and that there will be job losses at Bombardier. Those men and women will find less support than ever and this order will do nothing but compound their difficulties as they try to find their way through the world of unemployment.
As the Minister mentioned, Northern Ireland has some of the highest levels of long-term unemployment in the United Kingdom. Almost one in 10 adults of working age is in receipt of disability living allowance—almost twice the national average—and so will be hit more than those in other parts of the UK. Belfast will be damaged most by the reforms. Poverty is a genuine everyday reality for many in Northern Ireland, and the reforms will serve no purpose other than to compound such difficulties. The cuts will hurt the vulnerable. They hit the disabled, families and children and Labour cannot be complicit in that.
We have to accept that despite the huge opposition to these so called reforms, they have been enforced on the people of Great Britain. But that does not make them any more palatable and it does not give any more reason also to force the changes on the people of Northern Ireland. We have to accept the very real circumstances of its history and of the current difficulties the people of Northern Ireland face. According to figures from the Northern Ireland Statistics and Research Agency, since 1998 more people have taken their own life in Northern Ireland than died throughout the troubles, with research showing that during the recession those figures increased. The suicide rate in Northern Ireland is 70% higher than the UK average. Forcing the vulnerable in society further into despair will do nothing to defeat this problem.
We support any work aimed at maintaining the long-term stability of the institutions in Northern Ireland, as those of us who remember the days of direct rule can attest; we will say how important it is to make sure that these institutions not only carry on, but flourish and improve. On that basis, we will not oppose this order today, but that should in no way be taken as our condoning what is being done by this Government to the people of Northern Ireland.
I thank the hon. Member for Blaydon (Mr Anderson) for outlining the position on welfare reform and the fact that it can be so pernicious in bringing about bad impacts on people already on a low income. I welcome the fact that the Minister for Employment is here today, as he has previously been in the Treasury. He has outlined this supplementary legislation.
My party has always been clear about our position, which is on the record both in this Chamber and in the Northern Ireland Assembly: legislation dealing with welfare reform should have been dealt with in the Assembly, as originally envisaged. Westminster’s interference in our devolved welfare arrangements was inappropriate, as were the subsequent fines. As a former Minister for Social Development in Northern Ireland for three years, I recall bringing forward “karaoke” legislation on welfare issues. Why should it have been different this time?
The Democratic Unionist party and Sinn Féin voted through the legislative consent motion in the Assembly to hand our welfare powers over to Westminster. Indeed, far from its original promises that no claimant would be worse off, Sinn Féin handed our welfare powers over to London to carry out its dirty work, while its Members do not even take their seats in this Chamber. The essence of devolution is to improve the lives of people in Northern Ireland, and devolution is damaged if the two largest parties in the Assembly and the Northern Ireland Executive pick and choose which powers they have and when they have them. People in Northern Ireland must be able to have confidence that the political institutions upon which we agreed in the referendum in May 1998, and the people and politicians involved, are serious about the powers they have and will fiercely defend any attempts to reduce them.
This legislation should have been a matter for the devolved Assembly, which should have resisted the Treasury’s interference and taxes on our devolved budget. Instead, the DUP and Sinn Féin were delighted to have the powers taken off their hands for some 13 months. My party made numerous attempts to build consensus on welfare reform as far back as 2010, both in the Assembly and in this House through my hon. Friend the Member for Foyle (Mark Durkan). He made those attempts when the original Welfare Reform Bill was going through the House—even before the issue came to the Assembly.
The Social Democratic and Labour party was always realistic about the implications of welfare reform and made the case for mitigation that was sustainable and would be included in the devolved budget. I can well recall a meeting we had with Lord Freud, then a Minister in the Department for Work and Pensions, where we outlined specific measures that would help to mitigate the impact of welfare reform in Northern Ireland. Surprisingly—or perhaps not so surprisingly—those mitigation measures areas were eventually to come about. We divided on the Bill last year and on the order when it came to this House in 2015.
I would welcome clarification from the Minister on another matter that is directly related to this order. My hon. Friend the Member for Foyle raised it last week. Clause 9 of the Finance Bill provides for the Treasury to ensure that
“no liability to income tax arises on supplementary welfare payments of a specified description”.
But it also makes provision for the Treasury to make regulations to
“impose a charge to income tax under Part 10 of ITEPA 2003 on payments of a specified description.”
The SDLP has been at the forefront of securing mitigating powers for the Assembly to enable it to make supplementary payments. Can the Minister confirm today that the clause does not give the Treasury the green light to interfere in decisions by the Executive and the Assembly on supplementary payments by dictating that those payments could be subject to a tax clawback? As he knows, such top-up welfare payments will be made from the Executive’s own devolved budget and will not come under annually managed expenditure, which is the usual route for the payment of benefits throughout Northern Ireland. In response to my hon. Friend the Member for Foyle, the Financial Secretary to the Treasury confirmed last week that the clause will not allow that. Can the Minister for Employment reconfirm that position?
As I said, the SDLP has worked to secure mitigation, and the passing of this order will be necessary to release the moneys for mitigation measures or supplementary payments, which we do not want to obstruct. For that reason, we will not push the House to a vain Division on the order today—I am sure some people will be pleased about that. Notwithstanding that, it is important to remember that welfare reform, and particularly the legislation upon which this order is based, will introduce pernicious measures into Northern Ireland and will have an impact on those with low income who are reliant on benefit. I fear that it could push people further into poverty. It is therefore incumbent on the Government to ensure that people are protected and that there is some form of cushion for them. I respect the fact that the mitigation measures will ensure that there is, but the Government must consider other measures to ensure that people can live decent lives.
Earlier today, the hon. Member for Belfast East (Gavin Robinson) initiated a debate on social fund funeral payments. The SDLP participated in that debate, because there is a feeling that those payments have been capped for several years and there has been no corresponding increase when the costs have exceeded the bounds of many people’s income. The Minister responding to that debate did not give us a helpful response about future DWP or Treasury measures to increase such payments. When we discuss welfare matters in relation to Northern Ireland, it is important that we take into account the special circumstances of the many people, particularly in urban areas, who find themselves unemployed, perhaps through no fault of their own, and are in receipt of benefits. They must have a financial cushion and protection in order to live their life without any detriment.
The fact that this order has been brought before the House today indicates the radical steps that had to be taken to rescue the Northern Ireland Assembly from financial and political collapse. Let us be in no doubt about this: the Northern Ireland Assembly faced collapse because of the attitude of those who, despite all the protestations that legislation on matters devolved to Northern Ireland should be dealt with by the Northern Ireland Assembly, took a totally irresponsible view and blocked the Assembly’s ability to make decisions. That plunged the Assembly into financial crisis.
It is less than a year since the welfare reform legislation went through the House of Commons. Although the matter had been devolved to Northern Ireland, it was always assumed that the legislation passed in this place would be reflected in the legislation passed in Northern Ireland. The bill was being paid through the AME payments that came to the Northern Ireland economy—in other words, it was money that was paid on demand. If unemployment went up, we did not have to find the money from the block grant; it came centrally from the Exchequer. If there was a change in the number of claimants for a benefit, the money was automatically made available.
Of course, there was opposition to some of the welfare reform measures—indeed, my party voted against a number of them—but once they had been through the House of Commons the stark choice for the Assembly was between deviating from those measures and paying for the deviation, and complying with them and ensuring that payments to the Northern Ireland expenditure block continued. There were some who, because of their minority position in the Assembly—the SDLP led the charge—wanted to have it both ways. They wanted to ensure that the budget in Northern Ireland was not put into jeopardy, but at the same time, like Pontius Pilate, they wanted to wash their hands of what was happening and say, “By the way, the consequences of welfare reform are nothing to do with us, because we voted against it. It was all those other parties that voted it through.” That was the position that we faced because of the political structures in Northern Ireland.
The hon. Member for South Down (Ms Ritchie) suggested that attempts were made to reach consensus with other parties in Northern Ireland. Can my hon. Friend recall any proposal that was made to build consensus and overcome the significant hurdle that he has just outlined, which was that we could either deviate from the welfare reform measures or follow them?
That was the problem. In his short intervention, my hon. Friend did not have the opportunity to explain what happened. We were not delighted that the powers were taken away from us, but because of the use of the petition of concern by the SDLP and others, the ability to bring legislation forward was blocked. We then faced a situation in which we could not bring forward our own bespoke Northern Ireland legislation because of the block.
I will give way in a moment, but let me just explain this, because it is important. Rather than being delighted that Westminster had taken responsibility, our party worked frantically to try to find ways of ensuring that the worst aspects of welfare reform—the ones that we believed were the most damaging and that, for structural reasons, could not be introduced in Northern Ireland—were dealt with by taking money from other priority areas. We used that money to alleviate some of the difficulties. That was blocked—stopped dead in its tracks—by the SDLP’s use of the petition of concern. We worked our socks off to try to get a bespoke arrangement for Northern Ireland, which could be agreed to by all of the parties and would therefore have some kind of democratic authority, but it was impossible to do that because of the actions of the SDLP. It protested that it wanted the legislation dealt with in Northern Ireland, but did its darnedest to ensure that it could not be dealt with in Northern Ireland and that it had to be dealt with here.
Let me refresh the hon. Gentleman’s memory, as I fear that he and his colleagues may have forgotten what actually happened. My colleagues in the Northern Ireland Assembly proposed an all-party Committee as far back—[Interruption.] It is not flannel. It was proposed as far back as March and April 2011 to address this issue. We wanted to achieve all-party consensus so that we could go forward to the Treasury here in London as a united team to achieve the best possible deal for the people of Northern Ireland.
I was the Finance Minister in Northern Ireland at the time, and I can remember those discussions. There was a whole list of demands. Basically, it was demanded that we should not introduce any of the welfare reform proposals and that we should just go ahead as usual. The important question was who was going to pay for it. There was a naive belief that if all the parties in Northern Ireland came to Ministers here in London, with the great and the good from Northern Ireland on their coat-tails, and pleaded a special case, we would somehow be exempt from the welfare changes that were being made in all other parts of the United Kingdom. That was the cunning plan. I am afraid that even those who were sympathetic to the SDLP’s point of view knew that nothing would come from it. Indeed, Baldrick could not have devised a more stupid plan had he sought to do so.
There is no point in saying that the SDLP tried to find ways of changing this; the only suggestion was that we should oppose the changes and say that we therefore did not want them for Northern Ireland. The more realistic position, and the one now reflected in the order, was to say that we should look at what resources were available, look at the most damaging aspects of the legislation and see whether we could find, within our own resources, the ability to mitigate some of them.
Over the term of this Assembly, we will find from our own resources—that means reducing the priority in some areas—a way to protect the most vulnerable. We will mitigate the measures by, for example, not enacting the spare room subsidy, or by compensating people for it. We may also use the work allowance and a range of other things. We will find half a billion pounds over the lifetime of the current Assembly to alleviate some of the impacts of the welfare reform changes, and those are reflected in the legislation that is before the House today.
It is a great pity that there was not the maturity to have those changes made through legislation that was debated and passed in the Northern Ireland Assembly. At the “Fresh Start” talks this time last year, or just later, it was agreed that, rather than going through the process of trying to force this issue through the Assembly when we knew the blocking mechanism would be employed again by the SDLP and some of its allies, it would have to be dealt with here in the House of Commons, and that is the position we are in today.
Let me just emphasise a number of points. First, there are welfare changes that we supported here in the House of Commons because we believed that welfare did need reform. Secondly, we believe that any welfare system ought not to be designed in a way to dissuade people from wanting to look for work—that is important. Therefore, we did support some of the changes, even in the debates here in the House of Commons. Thirdly, there were things that we did not support, but once they got through the House of Commons, and we knew we could not afford them in Northern Ireland, we accepted that they should be part of the legislation. Fourthly, there were things that we believed we could change and that we could find the money to change, with bespoke legislation for Northern Ireland, and those things are reflected in the proposal before us.
The last point is, of course, that this will all be devolved back to Northern Ireland at the end of this year. I trust that we will have learned from the debacle that brought the Assembly and politics into disrepute, and that we will learn that sometimes, there are hard choices to be made and that we should at least be prepared to face up to those hard choices and find ways of dealing with the consequences of legislation that comes from this place.
Will the hon. Gentleman not honestly accept that, really, the whole debacle was more about him and his party not wanting to troop through the Lobby in a love-in with Sinn Féin to inflict poverty on people in Northern Ireland?
This is the amazing thing: I know there are all these attempts to rewrite history, but it was a DUP Minister who actually brought the legislation to the Assembly—who was prepared to walk through the Lobby and to vote for it. However, because a petition of concern was introduced by the SDLP, even if a majority of Members in the Assembly had voted for the legislation, it would still not have become law. Once that petition of concern was triggered and the legislation was turned down, we could not have any welfare reform Bill. That is the truth of the matter—not that we ran away. We faced up to things. I can remember doing interview after interview where we even faced flak from people who said, “You’re going to hurt individuals because of part of this legislation.” We argued, “At least we’ve done something to mitigate it. We have got the best possible deal.”
Can I just say that we did get changes and allowances made by the Department for Work and Pensions? I want to give credit to Ministers in the Department. When we were negotiating on welfare reform, they accepted that Northern Ireland could make changes, albeit that we had to accept the financial consequences of those changes. However, flexibility was demonstrated by the Department, although it was rejected by those who wanted simply to be able to say, “We are purer than everyone else on this issue. We have stood on our principles”—regardless of the consequences of that.
We have the legislation that we have today. Those who are most vulnerable in Northern Ireland have been safeguarded by the changes that have been made and by the resources that have been devoted to this issue by the Northern Island Assembly, and that has been a painful choice, because, of course, it means that there is less money to spend on other things.
The hon. Lady had plenty of opportunity to make her point during the debate, and I have allowed three or four interventions already—I know she is struggling with the case that she has and with the embarrassment of the way in which the SDLP has handled this issue.
We now have this order. I recommend it to the House—it is the best deal we could possibly have got. Unfortunately, it would have been far, far better had it gone through the Assembly, but because of the Assembly’s structures and the ability of minority parties to obstruct legislation through a petition of concern, this measure was the only avenue by which we could ensure that the Assembly finances were protected and that the political process in Northern Ireland was able to continue.
I may come later in my short speech to a few of the points that the hon. Member for East Antrim (Sammy Wilson) raised. First, however, on the detail of the legislation, I want to make it clear that the Ulster Unionist party supports the benefit cap, for example, because it is important that we keep people in work. People are better off in work than totally relying on benefits, so we do support a raft of these issues.
We are still concerned that the split cap level between London, where it is £23,000, and the rest of the UK, where it is £20,000, represents the most significant non-conformity in the UK’s social security system. It will need to be watched closely, and the issue is obviously with the reserved Government here at the moment. Clearly, that is where the watching brief must be, and I am sure that the Northern Ireland Assembly and Executive will also make representations here.
It had originally been planned to introduce universal credit in Northern Ireland from 2017, but that has now moved to the autumn because the development work on the Northern Ireland changes to the universal credit information and communications technology system has been delayed. The deadline still remains June 2018. As such, the Department for Communities in Northern Ireland has now found itself with the unenviable task of trying to implement one of the biggest shake-ups in a generation over less than 12 months, but I am sure it will manage that with the help of others.
We still do not support the abolition of the work-related activity component of employment and support allowance for new claimants from April 2017. However, the debate has been held, and the Government have not taken that on board, so we must progress with what we have. We must now move on to identify all the additional support and help that claimants need to help them return to work.
On a more principled issue, there is huge frustration that, first, this measure has had to come back here to be implemented and, secondly, that it has taken so long, at a huge cost to organisations such as the health service and the education service, where there have been delays after delays. A lot of this has just been grandstanding. I fully accept the point that some people just did not want to vote for this in the Northern Ireland Assembly and Executive. Let us be blunt about it: Sinn Féin was the biggest proponent of that, assisted to some extent by the SDLP. The reality is that this issue could have been resolved many months—in fact, years—ago. The delays have been at a huge cost to the people of Northern Ireland—the ordinary people who needed that health care and that education.
I support the continuance of this measure. There are some changes that I would have liked to see that did not happen, but we are where we are, so I support the progression of this measure. Clearly, however, we cannot get into another mess like the one we have been in for the last couple of years; otherwise, the Northern Ireland Executive and Assembly will be back to a very difficult position and, once again, to stalemate.
It is a pleasure to follow the hon. Member for Fermanagh and South Tyrone (Tom Elliott). I want to support what my hon. Friend the Member for East Antrim (Sammy Wilson) said very powerfully about why we are here today debating this statutory instrument. It is important to emphasise that this is not a situation that we on these Benches wanted to see. We want to see the Northern Ireland Assembly legislate in those areas that are devolved, although it should be noted that the Scottish Parliament, with the extensive powers it has, does not have responsibility for welfare. This is an area where Northern Ireland took responsibility, and those who negotiated the 1998 Belfast agreement decided it would be a good idea to devolve welfare to Northern Ireland, with the massive cost that comes with that, although the vast bulk of it, as my hon. Friend said, comes from direct payments and not out of the Northern Ireland block grant. As a former social development Minister back when devolution began in 1999, I remind the House that the understanding was that there should be parity, because if we deviated from that, then Northern Ireland would have to pay for it out of the block grant. Areas such as hospital spending, education, the environment and housing would all have to suffer cuts to pay for any deviation.
This comes to the crux of the arguments that took place in the Northern Ireland Assembly in recent times. People in certain parties—notably the SDLP, and at times Sinn Féin and others—would say, “Let’s deviate, let’s do our own thing—we’re not accepting these welfare cuts.” Their proposal to try to get something for Northern Ireland was to say, “Let’s set up a committee, go and knock on the door of the Treasury, and demand that Northern Ireland receives hundreds of millions of pounds extra,” which was never going to happen.
Had this measure not been introduced—had the “Fresh Start” negotiations that took place primarily between the DUP and Sinn Féin not had a successful outcome—then by now we would have had full, untrammelled direct rule from this place. That is the reality of it. We would have had welfare changes in Northern Ireland that were exactly the same as those in England and Wales. There would have been none of the mitigations—none of the changes that we implemented, and wanted to see implemented. So the consequence of the approach of members of the SDLP and others who opposed a sensible compromise would have been full, untrammelled welfare changes of the sort that they say they oppose.
Can the right hon. Gentleman enlighten us, because I have not got to the bottom of it, on why Sinn Féin has done such a somersault on this? It totally opposed it for years, and then all of a sudden it seemed to come to its senses and accept the principle of it. Can he shed any light on that?
It is for Sinn Féin to explain its own position. It is not for me to speak for it, especially when its Members do not come to this House. Certain Members are often seen about the corridors. They are here to collect their allowances—their political representation money and their constituency office allowances—but that is all they do; they do not take part in any other parliamentary processes. I will therefore leave it to them.
The reality had to dawn on people in Northern Ireland that we were facing the collapse of the political institutions. It is a bit like a local council in England or Wales, or anywhere else, being told, “Here’s your financial settlement—here’s what you’ve got to work within,” and the leading party there saying, “Sorry, we’re not going to accept that. We’re going to set budgets that are way beyond that, we’re going to just ignore the financial realities, we’re not going to make any compromises which will safeguard the most vulnerable”—
No. The hon. Lady had plenty of time to put her arguments to the House, and the fact that she was unable to put any convincing arguments is her responsibility.
In terms of financial responsibility, serious parties of government—parties that are serious about running countries and being in government—have to take difficult decisions within the financial parameters that they are set, especially in a devolved Government. If we simply say, “We’re not going to do that—we demand that you give us more,” it eventually leads to collapse.
Let us remember that the people of Northern Ireland had their say—
No, no—the hon. Lady has had her opportunity to speak, and I am not giving way.
The people of Northern Ireland have had their say. There was an election in May in which they delivered their verdict on the whole social security debacle and on how the DUP and other parties had performed. The SDLP and certain other parties had their worst ever result in Assembly elections. The DUP was returned with one of its best results ever and is back at the head of government in Northern Ireland. The people of Northern Ireland saw very clearly what was going on. They recognised that parties and politicians have to face up to their responsibilities. If they are not serious about that, they will be rejected at the polls.
I, too, welcome this order. I wish the DWP Minister, who has moved from the Treasury, well in his work. I hope that we come to a point where we do not need such legislation to come to the Floor of the House of Commons and can get back to dealing with it in the Northern Ireland Assembly.
Let me emphasise that this order fulfils a vital commitment made as part of the “Fresh Start” agreement. We have had a robust debate on some of the historical aspects of how we got to this point. In the interests of time, I think it best that I do not reflect further on that. Suffice it to say that the two largest parties in the Assembly signed up to the “Fresh Start” agreement of which this legislation was a crucial part. Moreover, the Assembly passed a legislative consent motion supporting the legislation to be dealt with here in Westminster. As the right hon. Member for Belfast North (Mr Dodds) said, Northern Ireland has long kept to parity on social security, as set out in section 87 of the Northern Ireland Act 1998. Restoring that parity is a crucial part of keeping the Executive’s finances stable. The provisions on the welfare supplementary payments will be put forward in full detail by the Executive and the Assembly.
In response to the question about taxation from the hon. Member for South Down (Ms Ritchie), supplementary payments to non-taxable benefits will be non-taxable, and supplementary payments to taxable benefits will be taxable, so the tax treatment will be the same as in the current system.
This order is a crucial part of delivering the “Fresh Start” agreement. It will help to build a politically and financially stable Northern Ireland. I commend it to the House.
Question put and agreed to.
That the draft Welfare Reform and Work (Northern Ireland) Order 2016, which was laid before this House on 6 July, be approved.