Poots to pit welfare reform against impending NHS spending ‘cuts’ in Northern Ireland?

So, relax. Despite some fevered rumours to the contrary Ed Poots is calling time on the current executive, yet. Despite, or perhaps because of, a wrap over the knuckles for a £13.1 million overspend in Health, he’s gone into overdrive to point out that a £20 million rise in the Health budget is in fact a real terms cut.

As the BelTel notes

Edwin Poots insisted the health service would not be able to function properly if a £140 million shortfall he claimed his department was facing was not at least partially met.

In a radical move, the Democratic Unionist minister warned he will not approve a significant number of potential cuts earmarked by officials, opening up the possibility of an overspend he estimated at “many tens of millions”.

Mr Poots said he would instead outline the proposed cuts to the Stormont Executive as a whole, leaving fellow ministers to vote on whether they should be implemented.

He said if cutbacks were then approved it would be a “Northern Ireland Executive position”, not his.

Pushing the health back onto the executive is a politically interesting move. Effectively it’s tipping a shortfall in health spending (presumably with outline cuts in frontline services) and inviting the Executive to measure it against Sinn Fein and the SDLP’s position that retaining the current benefit structure is more important.

This could turn into an interesting battle over a completely non tribal issue (for once). Another madcap round of political chicken anyone?

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  • Presumingly having sat at the table for the June Monitoring round and agreed real term cuts, he is lining up for the next round. With all the parties jumping with glee (haven’t heard a word otherwise) at the advent of tax varying powers over Corporation Tax, how will they all cope with a ‘welcome’ cut in block grant of considerably more that the current reduction ref welfare reform? Perhaps ‘non-tribal’, but still no sense of intelligent life.

  • mickfealty

    I’ll believe the Corpo Tax deal when I can see the whites of it’s eyes. Perhaps they are gambling on an economic upturn? Or

  • Think they are gambling on the Conservatives out of power in a year and that somehow Labour will reverse the changes – despite Welfare Reform polling positively and no indication that Labour will be able to afford to undertake reversal other than perhaps a token removal of the extra room deduction. Economic upturn in NI does not mean a greater tax take, as most the greater part of the NI economy is public sector. Capital expenditure in NI has not been hit (no A6? has meant too a number of other road projects brought on sooner than would have been possible). So they’re heads are in the clouds if they think they can wait it out 2015/2016.

  • Michael Henry

    ” leaving fellow Ministers to vote whether they should be implemented ”

    The cowards way out- the Budget will remain nearly the same as long as other ministers pass it – Poots should not be minister if he can not do the job himself or will not resign over this issue- the man does not care about health care-

  • mickfealty

    Labour? Anyone reading outside the bounds of our own little world will understand just how few choices either party has in this or any other regard.

    Whilst it is true that Sinn Fein are burning resources and opportunities here, I doubt it is in any realistic hope that something will turn up.

    It’s more likely that they are planning to slip into government in Dublin on a rising (expansionist) tide without anyone noticing they’ve slipped the leash of ‘leftist’ politics for a nationalist centre right.

    At which point it will fold all its northern cards to the DUP.

    The brilliance of such a plan is that it leaves the SDLP out on it’s own again looking like it has no clue what day of the week it is. Ha, principles, who needs them?

  • mickfealty

    Nah Michael. He’s just making sure that when patients start suffering (or worse) that public understand that the decision to disinvest in the NHS was the Executive’s, and not his.

    Nice one from Newt this morning…

    Oppose welfare reform together at Westminster, says Gerry. SF is the only executive party with MPs that didn't… http://t.co/Ai5adU2XDN— Newton Emerson (@NewtonEmerson) August 22, 2014

    Never there when the real fighting’s on… 😉

  • Morpheus

    If I were a betting man I would say that the Shinners will hold out until Westminster removes welfare powers from Stormont…


    …and implements the cuts anyway. When the crap hits the fan in Northern Ireland – and it will hit the fan because these are totally blind cuts with no thought to the consequences – then the Shinners will back and say to everyone who was on benefits, be they PUL, CNR, Pensioner, disabled etc, that this is exactly what they were fighting against.

  • mickfealty

    And what makes you think they’d do that? This is why Poots is transferring the blame a priori to the Executive for cutting his budget next time round.

  • mickfealty

    So say all the DUP’s rivals. BBC are going with Martin’s line on this. The same folk have been telling us for two or three years that Robinson is about leave.

    Personally, although I’ve mentioned it above, I don’t know for certain why this spat has blown. But I’d guess that Hamilton has to play straight bat on this, since he’s got a central responsibility to all Executive ministers.

    We’re not talking about this round (which has been agreed, but the next one when if we stay on the track we are welfare is going to ship a lot extra money out of the capital as well as revenue budgets.

  • Michael Henry

    Three DUP voted no Whilst 5 were absent- shows how divided they are with all of them supporting Welfare reform at the Assembly but just three of them opposing it at Westminster –

    One SDLP no vote whilst the other two were absent including the party leader Allasdair McDonnell-no leadership from the Stoops on this issue- thanks for the figures-

  • Reader

    I don’t see how you can say that the DUP are divided. Voting for the least worst option in the Stormont Executive is not in conflict with making it clear in Westminster that the menu is unappetising.
    Still, we do know for sure that SF supports departmental budget cuts, because that’s the option *they* chose in the Executive, and SF only accepts stuff they support. Isn’t that right?

  • Michael Henry

    Reader- ” I don’t see how you can say that the DUP are divided “-

    Like I said-5 DUP MPs would not turn up to vote no at Westminster when they knew that there Party position at the Assembly was a big yes to the welfare cuts-

    ” the least worst option “- this can be the DUPs new campaign slogan in next years Westminster elections- Vote DUP to get your Least worst option-it could be a winner for them-

  • Reader

    And for SF it appears that Departmental cuts are the “least worst option”. Same justification as the DUP; different option taken; same campaign slogan.

  • Comrade Stalin

    streetlegal frequently posts made-up nonsense spun to sound as if it is authoritative. There isn’t a single shred of evidence for any of the above. I doubt there is a leadership “campaign” and the idea that Dodds would lead the party from all the way over in Westminster simply doesn’t stand up.

    I would imagine that on this particular issue the DUP are pretty well united and that Poots’ threats about withdrawing the executive were probably Robinson’s idea. As other observers have noted there is a contrived air to things; suddenly after several years in office there is a funding crisis that supposedly wasn’t there before. This all looks like a DUP pretext to withdrawal from the executive.

  • Comrade Stalin

    Michael, let’s see how John O’Dowd feels about it when the cuts reach his department. As they surely will.

    I can’t see the Executive voting to push the health department cuts in over Poots’ head, or the DUP nominating another minister to take his place if he resigns. I have a feeling that the DUP are not bluffing here. If Poots resigns then they are out of the executive, which will then collapse.

    A collapse is not a good outcome for Sinn Féin. Who would want to be a coalition partner in the Dáil with a party which would prefer to bring down the government than negotiate and take the odd tough decision on the chin ?

  • Comrade Stalin

    Corporation Tax will almost certainly be on the table. But how can Sinn Féin vote it through given that they’re opposed to the cuts in the block grant that everyone already accepts this will entail ?

    I had an interesting discussion with IJP about this recently and he had an interesting point. If a corporation such as Barclays set up a brass plate office in Belfast with a desk and a phone and declared their tax here, this is money that will be taken out of our block grant without any jobs being created in return. In 2011 Barclay’s paid £300m in tax. In 2014, Tesco paid £645m in corporation tax. If Northern Ireland had a corporation tax rate of, say, 12.5% as opposed to the current UK rate of 21%, that’s nearly £350m taken out of our block grant which dwarves the losses associated with recent cuts imposed from London.

    I really don’t think people have thought this through.

  • Comrade Stalin

    Labour have already said they will not be able to reverse the Tory spending plans in the short term.

  • Comrade Stalin

    and it will hit the fan because these are totally blind cuts with no thought to the consequences

    England, Scotland and Wales seem to be coping. Why are we special ?

  • Michael Henry

    Comrade-” let’s see how John O’Dowd feels about it when the cuts reach his department “- He will handle it like a man not cry like the Poots baby-

    ” I have a feeling that the DUP are not bluffing here “- aye like Robinson was not bluffing when he said he would resign if he did not get his own way over the OTRs-the DUP can run but they can’t hide- if they don’t want to play in the Assembly that’s their problem- plenty of others will take up the slack-

    ” Who would want to be a coalition party which would prefer to bring down the government “-

    Who cares what other party’s think- it will be up to the people to decide who they want to elect and Sinn Fein is surfing that wave-

  • mjh

    Genuine question Comrade,
    What strategic benefit do you think the DUP believe they would gain by collapsing the Executive?

  • chrisjones2

    Why?The agenda is to make the children grow up

  • Zeno1

    “I really don’t think people have thought this through.”

    I agree. But even apart from Barclays etc and brass plating. The bottom line is we would be taking hundreds of millions out of our budget and giving it to businesses who are already making profits.
    Should we take that out of the Health, Education? Which departments can afford to give money away to the already rich? As Liam Clarke points out, we could introduce Water Rates and increase Household Rates, but that would mean that the working people who are not exempt are subsidising rich businesses.
    The real problem however is that there is no guarantee that jobs will be created.
    It may seem incredibly simple but my solution would be to cut corporation tax for businesses who create jobs. The alternative is to throw hundreds of millions at businessmen and hope they might create jobs.

  • Comrade Stalin

    Getting the British government involved and focussing everyone’s minds on the fact that holding core government departments to ransom is not the way to run a country.

    Direct rule benefits nobody.

  • Comrade Stalin

    if they don’t want to play in the Assembly that’s their problem- plenty of others will take up the slack-

    The government has to have the inclusion of the two largest parties or it cannot stand. That, I would remind you, is Sinn Féin policy, not DUP policy.

  • Comrade Stalin

    The whole idea, which isn’t entirely unsound, is that corporations move their businesses here and create jobs. This does actually happen within the RoI which, at the time when they cut corporation tax in the first place, were starting from an initially very low corporation tax revenue base. The low Irish corporation taxes are subsidized, relative to UK rates, by higher rates of income tax, VAT and so on, and pseudo-taxes such as private health insurance/VHI. It’s an economic policy which has actually worked (although the Irish economy also benefits from proximity to Europe, a well educated English speaking population, sympathetic ear on Capitol Hill etc).

    But creating a tax haven inside the UK is a different proposition. For it to work the UK would have to come up with a system where people had to employ so many people within a certain region in order to benefit from the discounted tax, but that would probably run into problems with European state aid rules – the EU prevented Ireland from implementing selective corporation tax rates a decade or two back.

  • Comrade Stalin

    I agree with you that that’s probably what SF want, but it’s a race against time. It’s a year until the next Dáil elections and a lot could happen during that period. If the Executive does collapse, or go into some sort of temporary freeze pending negotiations (which is more likely) because Sinn Féin are an obstinate and unyielding partner in government, it would be a pretty clear signal to anyone watching that they would be a poor candidate to partner in an Irish voluntary coalition.

    Any partner in the Dáil will be looking for SF’s signs of maturity in government, and so far there’s precious little for them to go on. And I suspect someone like Pearse Doherty would understand that whereas the bearded wonder and the adherents of his personality cult singularly do not.

  • Zeno1

    Newton Emerson says in today’s Irish News.
    Sinn Fein, the DUP and London agreed a deal in May 2013 that would have phased in Bedroom Tax over for years for New Claimants only and allowed time for DSD to build more one and two bedroom residences which would remove the need for bedroom tax. In short it was a brilliant deal that would have cost £17 million. But because it may have caused Gerry Adams some embarrassment in the south, SF pulled out. The consequences are that DSD has to find £29 million before Christmas and have warned this will mean significantly increased rents. So the “Bedroom Tax” will be replaced by the Sinn Fein Tax and every tenant must pay it.
    It kind of reminds me of when we had the 11 Plus and it was free, but now because of SF we have entrance exams and they have to be paid for.

  • Zeno1

    Comparing ROI and NI is not a like for like comparison. We couldn’t operate or facilitate a set up that allows the corporates to dodge tax in return for jobs. I’m not even against that, but even if we lowered CT we still wouldn’t be on a level playing field.

  • Gopher

    Really, Stormont has been a fiasco.

    What is happening presently is mono cognitive nationalism values a seat in in West Belfast or Foyle over anywhere else. For some reason nationalism in West Belfast has more of a cache than say South Belfast. It has not sunk in yet that it is possible to lose seats to Alliance, Greens or fail to make quota and let a unionist in.

    It started over Gerry’s ego trip and developed when turning down the deal into a line in the sand issue after the local elections with the SDLP and SF looking over their shoulders at the micro Republican and Socialist parties. The SDLP was waiting for SF to blink to blame them and they aint and SF want the SDLP to buckle to blame them which wont happen because bizarrely as it sounds for a party that cant make a quota in West Belfast they think this is a back to the future issue were they can time warp back to the seventies in popularity.

    The DUP (and Alliance and UUP) know the “nationalists” have hoisted themselves on their own petard over this and have created a nice little Verdun for themselves and are now applying some pressure. Basically a wedge is being driven in to separate the letter of the good Friday agreement from the spirit. You will find now people will vote or more correctly not vote to support the spirit of the agreement in increasing numbers

  • Comrade Stalin

    I’m not sure about this. The West Belfast electorate are one of several that SF could easily simply ignore, knowing that they will stay loyal to the party come hell or high water. During elections SF barely bother to do any campaigning there, yet Gerry Adams comes out with the highest personal vote of anywhere in the UK or Ireland. It’s somewhat similar for the DUP in places like East Antrim.

    I’m not banking, in the short term, on any change in the electoral trends of the past 15 or so years. If anything there will be consolidation.

  • Gopher

    West Belfast will stay nationalist, Foyle will stay nationalist, hard mono cognitive the Brits, Tories and Cromwell are to blame nationalist. In the suburbs, while after a bottle of wine the Brits, Tories and Cromwell are obviously to blame I still like a my job and the chance of a pay rise and not a pay cut and like the idea of not waiting a month on a hospital appointment. My guess is turnout is going to fall.

  • Michael Henry

    If the DUP walk away from the Assembly then they are no longer a part of it- the UUP will be the largest Unionist party- If Sinn Fein were to walk out do you think the Assembly would collapse-

  • streetlegal

    It is well known that Robinson wished to install Jim Wells as Health minister in place of the incompetent Poots. But owing to his weak position as party leader, Poots remained in the Executive, with strong support form Nigel Dodds. Not for nothing is Nigel known as ‘The Mighty Dodds’. His influence within the DUP is perhaps stronger now that it ever was and he has continued to pull the strings – much to Robinson’s chagrin – from outside of a weak and discredited Stormont Executive.

  • Michael Henry

    Emerson does not know the difference between what you say in negotiations and what you do in policy-The Sinn Fein tax is like the entrance exam tax- made up in your head to attack a party of principle –

  • Zeno1

    Ah right, that’ll be it.

  • chrisjones2

    What principle ….suck the teat till its dry then complain that its the teats fault?

  • chrisjones2

    “It may seem incredibly simple but my solution would be to cut corporation tax for businesses who create jobs.” ……most of which are service sector but which its Invest NIs policy not to support in favour of Hi Tec – tech call centers

    Yopu may think that is a very 1960s analysis but I couldn’t possible comment

  • chrisjones2

    In think the Corporation Tax bid is a nonsense. Look at it this way.

    Company X comes in and employs 1000 staff each paid £20000 – whoopee that a £20m boost to the wage economy and will lead to a big income tax and NIC take – say £4m all of which goes to the treasury. Government of NI benefits solely by a reduced benefits bill – say £5m a year, perhaps £6m

    The company will make profits by adding value. Lets say it procures £60m of goods and declares profits here of £15m – we lose corp tax of £15m * 10% = £1.5m. The Treasury gains the VAT on £60m – £12m

    So in this case HMT Gains say £16m

    Tax foregone is £1.5m

    Government of NI Gains £5m but loses the tax foregone

    So the Executive carries all the risk in this but gets around a quarter of what HMT gets. Let me guess….did the UUP Lead in the negotiations on this?

    Furthermore, who trusts this lot with any tax raising powers? Give them this and in 3 years all businesses will be paying 50% tax

  • Zeno1

    I’m not sure Gopher. I’m tempted to agree but reluctant to rely on the collective intelligence of the general public. If there is a fall SF will surely bounce back in 2016 which is when they will peak.

  • mjh

    I could see that being the case if the DUP had an understanding with SF to permit a short collapse until just after the UK and RoI elections, during which time the Westminster government would push through the welfare changes -and take any political flak. There would then be a short period of interparty talks and negotiation with the new UK government (simply for the sake of appearances) before normal service was resumed in August 2015. But how likely is that?

    Otherwise the DUP would be risking a prolonged period of direct rule. Eight months out from a general election David Cameron will have no intention of investing precious time, and risking political capital, on serious open-ended negotiations to find a new agreement between the DUP and SF. He would find ways to postpone that for the new government to deal with. Who knows where in its list of priorities the new government would place those negotiations?

    And if there was the perception that the two main parties would adopt their usual high-maintenance negotiation tactics it might conclude that it would be best to wait until both parties wanted a deal sufficiently badly to work one out for themselves.

  • chrisjones2

    Dear Child …its called politics. One day when you are older you will understand

  • Zeno1

    When you have over 11,000 apply to work in a Supermarket I think it means we do need Jobs for people who may not have the highest qualifications.

  • Kevin Breslin

    When I read about the overspend, I was bothered, obvious inflation effects health more than any other department. However, without a real audit of this expenditure a raw figure by Hamilton shows his failure to address the issue. Doing a bit of mathematics and coming out with a negative number and a negative attitude is the bare minimum, and while that may impress the Newton Emerson types in this world who are openly center-right, it fails to tackle the cause of overspend. One of my own concerns was the installation of the child MRI scanner recently, where Potts said one of the reason for the delay was the need to install radiation shielding, shocking to anyone with a physics degree (though maybe not Nelson McCausland) when MRI is known to have no ionizing radiation whatsoever, merely radio-waves like you’d get on any Bluetooth and Wi-Fi device. If he has paid for thick concrete walls or lead shielding simply for this reason he has been taken for a ride.
    The issue of welfare is not a simple matter of the Protestant Work Ethic meets the Catholic Guilt complex on welfare (despite the Welfare cuts being lead by an English Roman Catholic coreligionist of the vast majority of the SDLP and Sinn Féin members), though that is something worth considering for those advocating non-sectarianism in our politics, yet firmly taking up one partisan side or the other. When it comes down to it, what happens to Welfare will effect Healthcare and vice versa.

  • Gopher

    Unfortunately the radiation shielding is likely a defence against lawyers, who when it comes to claims can stand the laws of physics on their head. So basically one has to go to get lengths and expense to prove every possible safe guard was in place for the staff. Remember the days when the works kettle was just there to make the tea and not a method of industrial genocide that needed you to pay £20 and get a sticker from a spark to prove it wern’t “old sparky”

  • chrisjones2

    Labour will not be there long enough

    Next time around is simple.

    Labour is only holding a hope of power because English seats are gerrymandered to their advantage. That will not hold

    Internally the hard left is gaining power…that will make the party unelectable

    If the referendum is Yes they lose all the Scottish MPs who are anti Tory. If its No and just Devo Max the quid pro quo has to be a major cut in the number of Scottish MPs

    Labour may get 1 more weak term propped up by the rump of the Lib Dems who will be annihilated next election, but thats it. Then its the wilderness for them

  • Zeno1

    “Emerson does not know the difference between what you say in negotiations and what you do in policy-”

    It does seem odd that you understand it completely and Newton doesn’t. What makes you think He doesn’t understand? Are there other people who don’t understand or is it just Newton Emerson?

  • chrisjones2

    Its all the religous right vs the G&T Faction in the DUP