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Stormont House Agreement

Volume 758: debated on Wednesday 7 January 2015


My Lords, with the leave of the House, I will now repeat a Statement made earlier today by my right honourable friend Theresa Villiers, the Secretary of State for Northern Ireland. The Statement is as follows.

“I would like to make a Statement on the political talks in Northern Ireland which culminated in the Stormont House Agreement on 23 December. When I last updated the House after the visit to Belfast of my right honourable friend the Prime Minister and the Taoiseach, Enda Kenny, I reported that 10 weeks of talks had so far failed to deliver consensus on any of the key issues. I made clear that the stakes over the coming days were high and that without an agreement before Christmas we were unlikely to get so close again for months, or even years.

Further intensive discussions duly took place on Wednesday 17 December and continued on Thursday and Friday of that week. Resuming on Monday 22 December, negotiations continued overnight, concluding some 30 hours later at around lunchtime on the 23rd. At that stage, we presented the parties with a final heads of agreement, reflecting many weeks of discussion and with the input of both the UK and Irish Governments, in accordance with the three-stranded approach. Key issues covered included the finances of the Stormont Executive, reform of the devolved institutions, and the legacy issues of flags, parading and the past. I will take each in turn.

The agreement sets a path for the Executive to put their finances on a sustainable footing for the future, averting the impending budget crisis which was threatening the stability and credibility of the devolved institutions. That includes the implementation of welfare reform, with certain agreed adaptations paid for out of the Northern Ireland block grant, alongside efficiency measures and reforms to the public sector. Measures to improve the way the devolved institutions work, including provision for an official Opposition, a reduction in the number of government departments, and a cut in the number of MLAs by 2021 are also part of the agreement. A commission on flags, identity and culture is to be established by June and, based on the party leader discussions in the summer, proposals are set out by the Government which open the way for a devolved system of adjudicating on parades, to replace the Parades Commission.

Crucially, the agreement also sets out broad-ranging new structures to deal with the legacy of Northern Ireland’s past. These include an oral history archive, a new historical investigations unit to look at the deaths that occurred as a result of the Troubles, and an independent commission for information retrieval established by the UK and Irish Governments. All of these bodies are required to operate in a fair, balanced, proportionate, transparent and accountable way, preventing any group or strand of opinion from being able to subvert the process or try to rewrite history.

The new system puts the needs of victims and survivors centre stage and has reconciliation as a key goal. Consensus on how to deal with Northern Ireland’s past has eluded successive Governments since the Belfast agreement was signed 17 years ago, so the significance of the progress which has been achieved should not be underestimated. The Government have agreed to contribute £150 million over five years to help fund the structures dealing with the past, meaning that the PSNI can devote its efforts to policing the present rather than the past. That funding forms part of a wider package of significant financial support from the Government amounting to £2 billion of additional spending power. That is made up of a combination of new funding and important flexibilities in relation to existing resources and it is targeted at Northern Ireland’s specific circumstances—the legacy of its past, its divided society and its overdependence on the public sector.

Last, but certainly not least, the agreement paves the way for legislation to devolve the power to set the rate of corporation tax for Northern Ireland. A Bill will be presented to the House shortly for First Reading. If the Stormont parties press ahead on agreeing their final budget and on delivering welfare reform legislation, the Government will use all their best endeavours to get the legislation on to the statute book before Dissolution. The parties in Northern Ireland have made it clear that corporation tax devolution can help them to rebalance the economy and attract investment because of Northern Ireland’s unique position of having a land border with the Republic of Ireland. I welcome the fact that it is this Government who are delivering that momentous and transformative change, subject to the important conditions contained in the agreement, and I call on the Opposition today to commit to supporting the Bill as a key part of the Stormont House agreement.

The agreement involves compromise on all sides. It is fair and balanced and it has been widely welcomed. First Minister Peter Robinson hailed it as “a momentous step forward”. Deputy First Minister Martin McGuinness described it as “a remarkable achievement”, and,

“a fresh start we need to seize with both hands”.

President Obama said that Northern Ireland’s political leaders have shown that,

“there is a way to succeed for the benefit of all”,

and Secretary of State Kerry called their actions “statesmanship, pure and simple”. But securing an agreement is not the end point—far from it. There is much work ahead on implementation for the Executive, for the UK Government and, where appropriate, for the Irish Government. However, I give this assurance: if the parties in the Executive press ahead on that, the Government will implement our side of the agreement and we will do it faithfully and fairly. There are no side deals.

In closing, I pay tribute to Minister Charlie Flanagan for his crucially important contribution to the process. I would also like to thank the US Administration, and in particular Secretary Kerry’s special representative, Gary Hart, for their support. I thank all the officials at the Northern Ireland Office who worked on this process. Above all, I would like to record my appreciation for the leadership provided by the five Northern Ireland Executive parties.

In the Government’s view, the Stormont House agreement represents a genuine and significant step forward for Northern Ireland, offering the prospect of real progress on some of the most intractable issues we face there—problems that have defied multiple attempts to resolve them over the years. The agreement gives the five parties in the devolved Executive the chance to refocus and work together with renewed confidence for a more prosperous, more stable, more united and more secure future for the people of Northern Ireland. I urge them to seize the opportunities it presents to build a brighter future for Northern Ireland, and I commend the agreement to the House”.

My Lords, first, I thank the Government for making advance sight of the Secretary of State’s Statement available to us. Her Majesty’s Opposition welcome many aspects of the agreement that the Minister has outlined to the House. It is not perfect, but it is a genuine advance on the stalemate of the past two years. We congratulate the Secretary of State, the Parliamentary Under-Secretary of State and her counterparts in the Irish Government on their painstaking and, I am sure, at times painful facilitation of the talks.

Throughout the political impasse of the past two years, we have repeatedly called for a more active role from the Government. We hope that the right lessons have now been learnt about the consequences of disengagement for political stability and momentum in Northern Ireland. I am sure that the Minister will agree that there is no room for complacency. As we have seen in the recent past, unresolved issues such as parades and flags have the potential to fuel public concern and disorder, and therefore ultimately lead to political instability.

Her Majesty’s Opposition also pay tribute to Northern Ireland’s political leaders for stepping back from the abyss and restoring some level of public confidence in their capacity to move Northern Ireland forward. It is acknowledged that they face unique challenges in managing the transition from a society scarred by conflict and sectarianism to a normal society. However, this acknowledgment does not mean exemption from difficult political choices about priorities, or any expectation of blank cheques from this or any future Westminster Government.

Turning to the agreement itself, Her Majesty’s Opposition welcome the adoption of a viable budget for the next financial year. It is right that this includes some elements of welfare reform while excluding the pernicious bedroom tax, which an incoming Labour Government will scrap.

However concerns remain about the Government’s rush to introduce legislation on corporation tax devolution, a decision that will have profound implications for Northern Ireland and the rest of the United Kingdom. There should have been a proper consultation process, including an analysis of the financial impact of significant reductions in corporation tax on Northern Ireland’s block grant, before introducing legislation in Parliament.

It is good news that a comprehensive system has been agreed to deal with the past. It is to be hoped that, over time, victims and their loved ones will develop confidence in the integrity of the new architecture and get the truth and justice they have been denied for too long. We also support the Government’s decision to make new investment available to boost integrated education, which is one of the most powerful manifestations of what a shared future can mean.

However, I have a number of questions for the Minister. First, what assessment have the Government made of the impact on the block grant for Northern Ireland of reducing corporation tax to the levels in the Republic of Ireland? Secondly, what criteria will be applied to determining whether penalties will be levied by the Treasury next year in connection with welfare reform? Thirdly, what is the timescale for the creation of a new system to deal with the past? Fourthly, what negotiating process will now be put in place to deal with unresolved issues such as parades and flags, and other identity issues such as the Irish language? Fifthly, what process has been agreed to monitor the implementation of this agreement?

These are genuine questions, to which we hope the Government have turned their mind. We do not want a situation where we are not totally and fully prepared—as far as possible—for any particular new situation in Northern Ireland.

My Lords, I welcome the broad support of the noble Lord and, in particular, the appreciation he has expressed for all of those involved in this process and the statesmanship that has been shown. However, I have to say yet again in this House that I reject all notions that the Secretary of State and the UK Government have been in any way disengaged from the process. The Secretary of State has been involved throughout the past two years in the processes that have gone on to reach agreement.

What changed significantly was that in the summer the leaders of the political parties asked the Secretary of State to become directly involved. Prior to that they were having discussions and negotiations—and, indeed, slowly making progress—on these issues but had failed to reach an agreement. It is significant that 12 weeks of intense discussions and negotiations, led by the Secretary of State and with the involvement, where appropriate, of the Irish Government, have led to this important agreement.

I regret that the noble Lord has not given the full support of his party to the proposal to devolve corporation tax to Northern Ireland. The desire for this across the community in Northern Ireland appears to unite both the political parties and the business community. They believe it is a significant issue for their future prosperity.

The noble Lord asked me a number of questions and I fear that I may not have been able to take down the full details. Obviously, I will review the record and write to him if necessary. However, I emphasise that the Government are keen to get working on the issues and with the bodies associated with the past, but I should point out that this needs Westminster and Assembly legislation. In contrast, we would expect the work on flags to be up and running by June. We are expecting the Executive to introduce legislation relating to welfare reform this month.

The noble Lord also asked me about corporation tax and adjustments to the block grant. There will of course be adjustments but precise details will have to wait until we know the rate and the precise shape of the plans for the devolution of corporation tax. As there has been with the Scottish Government and the Welsh Government, there will be appropriate discussions with the devolved bodies prior to the devolution.

My Lords, reflecting on the Statement just made by my noble friend, it is quite easy to understand why Peter Robinson and Martin McGuinness would be pleased to have an extra £2 billion a year to spend. I was less clear about what my noble friend meant when she said that this £2 billion a year would help to wean the Northern Ireland economy off its overdependence on the public sector. Will she explain what that means?

Perhaps I may first make clear to noble Lords that the additional funding is not £2 billion a year. It is £2 billion over a number of years in excess of five years. It is not £2 billion of additional money; it is £650 million of additional money over that period. The money beyond that is spending power associated with additional flexibilities granted for the Executive’s budget. The noble Lord asked about the efficiency of the public sector. The reforms that have taken place within the Civil Service and in the public sector generally in the rest of England, Scotland and Wales have not taken place to the same extent in Northern Ireland. Therefore, it is suffering from severe financial pressures. Those reforms need to take place. It is a condition of the additional funding that the Northern Ireland Executive embark on those reforms and we expect them to do that imminently.

There is time. I suggest we hear from the Liberal Democrat Benches and then the Cross Benches before we come back to the Labour Benches.

I welcome the Statement. I trust we are moving forward and that deadline diplomacy has worked. As ever, it is sad that we have to consider so much about the past. In the 75 paragraphs in the Stormont House agreement, 40 refer to flags, parades and the past. I note that the agreement establishes six new bodies; namely, a commission on flags et cetera, an oral history archive, a mental trauma service, a historical investigations unit, an independent commission on information retrieval, and an implementation and reconciliation group. It would be splendid if these bodies took matters forward, but of course they do not come for free. The document suggests that £150 million will be available over five years to help with these new bodies. What will the total cost of the new bodies be?

In particular, I welcome paragraph 69 under the heading “Outstanding Commitments”, which makes it seem just an afterthought. It talks about,

“initiatives to facilitate and encourage shared and integrated education and housing”,

and matters such as social inclusion. If we are really to see integrated services in Northern Ireland, what cost savings does the Minister believe there will be? It will be interesting to note, on looking further into the past, the contrast between the costs that we may well have to expend and what can be achieved in the future if we are to see some real integration.

The noble Lord refers to the issues related to the past. As was made clear in the Statement, issues associated with the past in Northern Ireland are really the biggest factor that has eluded previous agreements. If this set of bodies proposed here are established and are able to work effectively, clearly considerable progress will have been made. Noble Lords will have noted that there are measures built into this to monitor progress; significant effort is being made to make sure that progress is monitored on a regular basis.

The overall cost of establishing those bodies is not of course precisely known. The £150 million in the agreement is the UK Government’s contribution to that cost but, since those bodies touch upon devolved issues, it is entirely reasonable and totally expected that the Northern Ireland Executive will contribute to their cost. Present arrangements are not necessarily working very well and cost money—so this is not entirely new money.

The noble Lord referred to the costs of division. He knows from his considerable experience that various estimates of the costs of the divided society in Northern Ireland have been made. They are variable, but they all show significant cost to that society every year.

Could your Lordships keep their remarks short? There will be time for everybody. I indeed gestured in that direction and apologise if that was the wrong thing to do.

My Lords, thank you. I have four simple questions.

First, a number of cases are currently excluded under the Stormont House agreement from the work of the historical investigations unit. Those cases were previously investigated by the historic inquiries team. However, Her Majesty’s Inspectorate of Constabulary has said that many of these investigations were most unsatisfactory. Can the British Government ensure that they will not be embarrassed in future because our Article 2 obligations are not being complied with?

Secondly, can the British Government and the Minister assure us that the Government will ensure that the historical investigations unit has access to all intelligence and information, particularly that held in this part of the United Kingdom by the security services, the Armed Forces and GCHQ?

Thirdly, what actions will the Government take to ensure that the historical investigations unit has the full legal powers that it needs?

Fourthly, does the £150 million have to provide for victims, or will they be provided for separately? On the matter of trauma services there is a massive unmet need in Northern Ireland: that is a costly and lengthy process.

The noble Baroness first asked a question relating to human rights obligations. I am sure that she has noted the reference to that in the agreement. There is an awareness by the UK Government, and indeed all those involved, of the need to ensure that the processes abide by human rights obligations. Therefore, there is work to be done, in particular by the Executive but also by the UK Government, to smooth that process.

In relation to access to intelligence information, and indeed access to information in general, the UK Government will of course ensure that the required information is made available, while balancing the need to ensure the safety of individuals, which is an obligation that is always the case in these situations. It is our intention that the bodies concerned will have the powers they need to do an effective and efficient job, particularly on a timescale satisfactory to those who suffered during the Troubles.

Will the Minister confirm that the historical investigations unit will not be constrained from looking at any of the significant cases in the past? I could mention Ballymurphy and Finucane. Will it be able to look at those in the detail that it needs? Secondly, what is the relationship between the outcome of such investigations and the possibility that there might be recourse to the courts as a result?

It is expected that when there is a need for recourse to the courts, obviously there will be police investigations and decisions by the DPP on whether to prosecute in the normal manner. There is certainly no concern about that process in our minds. I am sure the noble Lord will understand that there is work still to be done in ensuring that the detail is fully fleshed out with regard to the bodies outlined here. Your Lordships will see that although there is significant detail in the agreement and it has been well thought-through, obviously there is a lot of work still to do on the day-to-day way in which these bodies are to operate. It is expected that there will be a meeting later this month where work will progress further on the bodies suggested in the agreement.

My Lords, £150 million is indeed a significant sum to deal with the past. But I ask my noble friend the Minister: if at the end of those five years significant inquiries are still to take place that have not been resolved, what will the Government do then?

The noble Baroness refers to the timescale that we are envisaging. For example, we hope that the historical investigations unit will be able to complete its work in five years. The Government of the day will have to consider the situation at the end of that time. It will be for the Government of the day to make that decision.

My Lords, I was involved in the talks leading to the Belfast agreement and representatives of all political parties with elected Members were involved in those talks. Why on this occasion were the elected representatives of one-third of the Unionist voters excluded from the talks that led to this provisional agreement? Is that the basis on which to get all-party support in the future?

When it comes to corporation tax, I very much welcome the views expressed by the noble Lord, Lord McAvoy. Of course businesses in Northern Ireland have welcomed the move because they will be paying less tax. But the Minister has confirmed—at last—that if the Northern Ireland Assembly reduces corporation tax in Northern Ireland, the block grant will be reduced. That will mean less for hospitals and education. It will be rejected by many people across Northern Ireland.

The noble Lord referred to the reduction in the block grant. That process is taking place with the devolution of other taxes. It is, of course, a decision that the Northern Ireland Executive would take in the light of their decision to pursue corporation tax devolution because the purpose behind pursuing it is to create a more prosperous society and to encourage the establishment of further businesses and further inward investment.

The noble Lord refers to the parties at the talks. I am sure that he is fully aware of the background details of how the talks developed over two years. It is therefore the case that the leaders who were there believed that at that time there was purpose in talking together.

My Lords, my question is extremely short. If I were a chief executive of a successful plc registered in London and corporation tax dropped to 12.5% in Belfast, as it is reasonable to assume, what reason would I give my shareholders for not moving my office to Belfast?

The noble Lord raises a legitimate issue which the UK Government have considered and which I know the Northern Ireland Executive is bearing in mind, but it is something for the corporation tax Bill when it comes before this House.

My Lords, can the Minister give an assurance today that the proposed new historical investigations unit will not equate criminals and victims as coequals, that innocent victims will be afforded the respect and regard they deserve and that a clear distinction will always be maintained as the HIU takes forward its work?

The historical investigations unit is being set up in a way which ensures that there will be cross-community support. I think that answers the point of the noble Lord’s question.

My Lords, when I chaired the Northern Ireland Affairs Committee in another place, it became increasingly clear to us over the five years we were working that there had to come a time when a line was drawn. I ask my noble friend to bear that in mind in conversations with the Secretary of State. We have another five years, but we cannot have another five years after that and another five years after that. The people of Northern Ireland deserve to live in the future, not in the past.

While entirely supporting the final sentence of my noble friend’s comments, I ask him to bear in mind that it takes a very long period of time to turn around a society as divided as that of Northern Ireland.

My Lords, on the issue of the past, I welcome the Minister’s explanation that there will be careful monitoring of the results produced by this process. In the light of Mr Adams’ statement a mere three weeks or so ago that the IRA had no corporate memory and therefore could not, in the context of the Maíria Cahill case, contribute in any meaningful way to the work of historical recovery, it is slightly difficult to see how we can have, in the words of the Statement by the Secretary of State for Northern Ireland, a process which is “balanced, proportionate, transparent and accountable”.

One hundred and fifty million pounds is a lot of money. It is 20% of the amount allotted for the Northern Ireland Civil Service early retirement scheme. The taxpayer is entitled to reassurance that there will be careful monitoring of this process and that for this £150 million there will be something approaching a real, balanced process. This cost is proportionately far more than the historical aspects of the Bloody Sunday inquiry, which is reputed to be so highly expensive.

The noble Lord points out the complexities of dealing with the range of issues that this agreement covers. The number of bodies being set up is significant. They fulfil a whole range of functions. It is intended that one of them should be established as an international body. It is intended that some of them operate completely independently of political representatives. Others do not, but there is always that balance when there is elected political representation.

It is important to bear in mind that the agreement makes provision for an implementation and reconciliation group to oversee the bodies and the work being done on the past. It is important to bear in mind also that the British and Irish Governments and the Northern Ireland Executive are committed to regular, six-monthly monitoring meetings to ensure that things are proceeding in the fair, balanced and transparent manner that I mentioned.

While understanding the particular circumstances in Northern Ireland, does not my noble friend think that there is a danger in this piecemeal constitutional reform? For example, what are we to say as unionists to the nationalists in Scotland who are demanding corporation tax powers on the grounds that it will help their economy when my noble friend is justifying corporation tax in Northern Ireland being set on precisely the same basis? Should we not be careful in moving forward with devolution that we do so on a basis that is balanced and clearly thought through? Is not my noble friend’s answer that she is not yet able to tell us what the effect on the block grant would be deeply worrying in the context of further devolution of tax powers?

The noble Lord points out that there is of course an inevitable read-across from one devolved nation to another. That is something that we are all very conscious of in relation to both Wales and Scotland. I should point out the one unique feature in relation to Northern Ireland: Northern Ireland shares a land border with the Republic of Ireland, which has a very much lower rate of corporation tax. Therefore, competition to attract business is very much more intense for Northern Ireland than it is for Scotland, Wales and England. It is important to bear in mind that unique position.