Kicking the [financial] can down the road, again.

According to the BBC’s Mark Devenport,

The Treasury has been asked to supply Stormont with a one-off loan of between £100m and £150m to ease its budgetary crisis, the BBC understands.

According to the reports, the proposal was discussed with the UK Treasury by the NI First Minister, the DUP leader Peter Robinson, and the NI Finance Minister, the DUP’s Simon Hamilton.  Whether that occurred before, or after, yesterday’s ‘special’ meeting of the NI Executive isn’t entirely clear.  From the UTV report

The development comes after it emerged that Mr Hamilton and First Minister Peter Robinson were in conversation with Chancellor of the Exchequer George Osborne over a proposal.

Executive ministers are to meet at Stormont later on Thursday.

Political commentator Eamonn Mallie told the Frank Mitchell Phone-In: “As I understand it, particularly Simon Hamilton has been in discussion with the Treasury.

“It’s reported his party is recommending that the Treasury should give a loan of £100m to £150m, which would be repayable in April in the new financial year.”

But, given the track record of DUP ministers taking legal action against NI Executive colleagues for not taking proposals through the Executive, I’ll give them the benefit of the doubt for now.

As today’s BBC report notes

The loan would enable ministers to reach agreement on immediate financial allocations.

It is believed the proposal will be discussed by ministers later.

The loan would also ensure Stormont did not breach its spending limits by more than £200m at the end of the financial year.

However, it would increase the amount Stormont would owe the Treasury next year.

It is not clear if Sinn Féin approves the proposal, or what conditions the Treasury might attach to a loan. [added emphasis]

Indeed.  Although it’s also worth pointing out that the current loan facility from the UK Treasury, the Reinvestment and Reform Initiative, was temporarily extended by £100million over two years under the Building a Prosperous and United Community agreement in June 2013, and subsequently re-profiled and extended by a further £30million in July of this year.

And the previous use of that emergency overdraft UK Treasury loan facility has not been without criticism.  Previously mentioned here in July this year

As the NI Audit Office reported in January this year – The Future Impact of Borrowing and Public Finance Commitments

According to today’s report, the Executive has, up to March 2013, accessed £2 billion of borrowing through the Reinvestment and Reform Initiative. Annual repayments have doubled in the past five years to £100 million in 2013 and are expected to peak at £140 million a year from 2016 to 2021. While borrowing is intended for financing Northern Ireland’s substantial infrastructure investment programme, recent expenditure funded from Reinvestment and Reform Initiative borrowings highlights the need for more clarity and transparency. [added emphasis]

[Don’t mention the shareholders in the Presbyterian Mutual Society… – Ed]  Indeed.

, , , , , , , , , , , ,

  • Jag

    So, our sex-trafficking pimp in Westminster pulls another bunch of flowers out of its arse. What’s that going to cost us? And, do they really think it distracts from the demands to clarify exactly, Northern Ireland’s economic standing.

  • Dan

    Why are the DUP off begging for more loans if it’s Sinn Fein who have created this mess?
    The things that shower will do to ensure their army of politicians and hangers on keep their comfy jobs.

  • Jag

    Interesting that in 2011, it was a plank of the SF election manifesto that they would tell the IMF, which was providing colossal loans to the country in a bailout, to get stuffed if the Shinners were to come into government.

    As their Deputy Ferris nicely put it

    “The question facing both Fine Gael and Labour now is whether they are prepared to put on the straitjacket or whether they will follow our example and tell the IMF to go home. There is no other choice and Chopra’s other reference to the possibility of even more severe cuts becoming necessary before 2015 prove that the IMF will impose an economic and social nightmare on this state.”

    Shurely, the self-same Shinners will now proceed to tell George Osborne to take his “loan” and spend it on coke and prossies? Shurely, after their righteous position on the other side of the Border, the SFers won’t accept a bailout in Northern Ireland which will need be paid for with austerity down the road. Shurely.

  • streetlegal

    This is part of the deal secured from David Cameron – the same deal that set up the Parades Panel. The price for all this was a pledge of DUP support (if required) for a minority Conservative government at Westminster after the election next year.

  • Neil

    As long as they have 5 poxy million for a shiny new bridge we’re all happy. Hopefully they can squeeze a bit more than 10 years out of it. God knows it’s almost impossible to cross the Lagan as it is.

  • Michael Henry

    Take as much money of the Idiot Tory’s as is humanly possible- the Tory’s will only spent the money on bombs and tanks anyway- and don’t pay the anti democratic Tories a dime back –

  • Croiteir

    Another pay day loan, hard to break out of the cycle isn’t it. But who cares? If the English are thick enough to cough up we should spend their dosh like there is no tomorrow. At the end of the day the English will pick up the tab anyway.

  • Comrade Stalin

    Please try to keep up. The past six months have been spent with everything on hold because SF refuse to accept a reduction in Northern Ireland’s “bailout”.

  • Jag

    Here’s a lesson on NI economic nomenclature

    Block grant = subvention = figures capriciously pulled out of Westminster’s ass

    Loan = ringfenced sum which must be repaid from future revenues

  • Comrade Stalin

    Still clinging to that theory that NI is an economic powerhouse that generates a revenue surplus.

  • Jag

    If it is an objective for NI to become an economic powerhouse that generates a revenue surplus, we need to know our starting point.

    If it is an objective to remain a dependent economic waif, then carry on as now.

  • delphindelphin

    This is obviously being built for republican cyclists who don’t want to go the extra few yards and use the Queen’s bridge.

  • barnshee

    “Block grant = subvention = figures capriciously pulled out of Westminster’s ass”

    This is covered in detail elsewhere however I will share a few pearls with you

    1 N I wages are on average lower than GBs the amount of Income tax paid is thus by definition lower

    2 Lower wages mean less disposable income so indirect taxes paid are lower

    3 Property values are lower- capital gains tax and inheritance tax payments are lower

    4 High dependency on welfare -poor disposable income indirect tax payment lower

    If you want to do a deal where N Ireland settles for the the taxes paid in NI HM Treasury will break your arm

    If you want real uninformed comment Slugger is normally a great place to start you might begin by exploring
    how NI has arrived in this state and what are the long strategies for improving it

  • Jag

    Hi Barnshee 1-4 all accepted, no problem at all, thanks for the research.

    Can you name me one other country in the world with a population of 1.8m that can’t economically survive? Okay, education in NI is not so good, there’s no wealth of mineral resources but the land is good and can support agriculture, the people speak (a version of) English, they can improve their education. The weather is a bit depressing, but we don’t have typhoons, earthquakes, tsunamis or severe flooding.

    I know it’s difficult when you psyche is as beaten up as some poor unfortunate sex-trafficked child, but believe me, you can build an economy and stand on your own two feet. If every other country in the world can do it, then why can’t NI?

    The obvious answer is that there are some who want to keep this country in a perpetual state of dependency, perhaps those self-same people think that dependency will strengthen the cellotape that binds this portion of Ireland to Britain….

  • Morpheus

    So the Government impose cuts on NI that are so deep and fast that NI is forced into taking a loan from Government.


  • Jag

    Why just a GBP 100m loan? Why not GBP 101m and restore all the cultural events?

  • jimbo

    Unfortunately the idea the “english” will cough up is a bit niave. It will still come out of our taxes in some Form. If you pay tax that is.

    So it appears our local “governent” has got us a £100 each in a loan. Don’t remember that in anybodies manifesto.

    When will Northern Ireland voters catch on that real economics is the big issue not tribal politics. While the tribes are fighting they just borrow money on your behalf. Look forward to it coming out if your wages.

  • jimbo

    Last time I checked the conservatives were elected in a democratic vote just because you don’t like them didn’t make it anti democratic. Time to grow up

  • jimbo

    Perhaps there is another group who have a vested interest in “the North” not being particularly successful. Just think how that would affect their vote. So in fact a successful and vibrant Northern Ireland would be more likely to stay within the UK.

  • Croiteir

    I couldn’t care less, the more the English subsidise us the better. Just underlines the failure of partition that it needs continuous financial support to keep. At the end of the day the amount of extra taxation on the individual here is minimal, how much will it put up my tax rate? I bet it is a fraction of a fraction. The English have to keep this house of horrors. Feed me Seymour, feed me all day long.

  • Jag

    Technically (because in the end I don’t think it will come down to this at all), reunification requires a majority vote on both sides of the Border. Folks in the Republic won’t want to buy a pig in a poke, so the finances of the six counties will need to be clarified. Also, folks in the Republic will be reluctant to reunify with a territory that is running up a terrible deficit.

    Republicans need to win this beachhead and get the finances of the six counties clarified.

  • Tacapall

    Maybe you should re-read the GFA Jag its pretty clear who’s responsibility it is to convince the people of Ireland what the benefits of a united Ireland are and what the will of the Irish people is –

    Article 3

    1. It is the firm will of the Irish nation, in harmony and friendship, to unite all the people who share the territory of the islandof Ireland, in all the diversity of their identities and traditions, recognising that a united Ireland shall be brought about only by peaceful means with the consent of a majority of the people, democratically expressed, in both jurisdictions in the island. Until then, the laws enacted by the Parliament established by this Constitution shall have the like area and extent of application as the laws enacted by the Parliament thatexisted immediately before the coming into operation of this Constitution.

  • Reader

    They don’t need you to pay them back. All they need to do is deduct it from next year’s package.

  • jimbo

    Nice to see you are happy to accept subsidies rather than have a proactive approach to some real politics. Again it’s interesting to note that the Republic really don’t have an interest in taking on Northern Ireland. Perhaps it’s because there are people happy to milk the system and take subsidies. ………..

    It doesn’t suit any sides purpose to ignore the facts. You don’t get something for nothing unless you’re happy living with a begging bowl in your hand. ?

  • Comrade Stalin

    Can you name me one other country in the world with a population of 1.8m that can’t economically survive?

    We dealt with this nonsense argument already.

    There is no such thing as a country that does not “economically survive”. All countries must balance their budget (either with the assistance of loans or not), or alternatively do a Zimbabwe.

    Northern Ireland’s level of public expenditure is subsidized by the British government. If Northern Ireland became an independent country, it would have to significantly cut public spending or significantly raise taxation to survive.

    The obvious answer is that there are some who want to keep this country in a perpetual state of dependency

    That’ll be those evil nasty Brits and their empire building. Remind me how this goes – they want to hold on to Northern Ireland and keep blowing £10bn per annum on us miserable gits because .. ?

  • Comrade Stalin

    Bang on the money Jimbo.

  • Comrade Stalin

    There’s a pretty serious risk to that, which republicans who have a clue will be aware of. What happens if you get the finances clarified, and it confirms that it’s a basket case ? (which anyone knows that it will – find a single economist who thinks that NI could sustain itself as presently run). What happens to your Irish reunification case then ?

  • Michael Henry

    They are not elected here jimbo- how many Tory’s will be standing in ( Northern ) Ireland for Westminster seats- not one in the Tory cabinet or leadership anyhow- the Tory’s would not know democracy if it bit them on the butt-

  • Michael Henry

    A Tory would need to have brains to do that- something they lack-

  • Reader

    Keep your fingers crossed that Labour don’t win the election then. I expect they would have a use for an extra 100 million next year.

  • jimbo

    Well for a start we live in the United Kingdom and have a parliament in Westminster all the MPs are freely elected and some of our local MPs actually attend and represent Northern Ireland in that parliament.

    Given the current goings on in the UK how effective would 17 votes be in a hung parliament.

    Whats the chances of getting our MPs to give us some effective representation.How good would it be to have a local MP in goverment?

    Then again our MPs would have to actually go and then not just disagree with each other for the sake of it.

    Time to grow up and participate in real goverment. We are a small country in a small United Kingdom in Europe. With some very big competitors in the rest of the world

  • Croiteir

    What the hell does that mean? Proactive approach to real politics? This is real politics. Unionists should fear the outcome of the collapse of Stormont. At least Jeffrey gets it.
    I want to see unionism being isolated. I want to see Stormont shown as a huge white elephant that cost the British a fortune, I want to see it not working. That is real politics to me, the reality of the cost of division and a border needs to be made clear. A failed entity needs constant support. As for the Republic not really wanting it. Have a border poll to check that out. I dare you, I double dare you.

  • jimbo

    Unfortunately you have to realise that this is real politics being played by bigots with a rosey view of what’s really going on. For a start look at the democratic vote. A majority of people in Northern Ireland are happy to stay in the United Kingdom. In fact even Sien Fein have signed an agreement stating they accept the existence of Northern Ireland. Even though they pretend that Northern Ireland dosnt exist. If you take any account of opinion polls. Over 70% of Northern Ireland Voters would vote to stay there. In the Republic over 60% of voters would not want partition to be removed. In fact quite a few would be happy to come back into the UK .

    So there it is you can sit with your begging bowl dreaming of shamrocks and leprechauns or we can get on with sorting out a decent country for decent people.

    A collapse of Stormont would lead to direct rule by the government that has the best performing economy in Europe. Maybe not a bad thing

  • Croiteir

    I cannot take any plea to democracy from unionism seriously as the partition of Ireland they support was the very antithesis of democracy. But anyway let us move on to the here and now. Of course it is real politics to seek the destruction of the UK as presently formed, the Scots had a go last month and no doubt they will do so again.
    Your appeal to some opinion polls is neither here nor there.
    I can dream of leprechauns and shamrocks and begging bowls brimming with gold at the end of the rainbow too. It is great fun, and in the real world hope and work for the destruction of Project Ulster. It is called democracy, which is why you are against it perhaps.
    I would not want to be ruled by the best performing economy in Europe. And I doubt the Swiss would want to take us on. I hope a collapse of Stormont may lead, not to the direct rule by the 24th best performing economy in the world, which is better suited to the economy of this region of Europe, but to the total absorption into that economy. We could do well with being in an economy with a GDP and GNP of 7.7 and 9.0 per cent respectively rather than stay in an economy that is centred on the interests of the South East of England which is facing uncertainty due to its ever increasing negative balance of payments, possible withdrawal from Europe and the disintegration of its constituent countries.
    I think that is real enough for you.

  • barnshee

    well not just SF
    Here are small clues

    1 The politicos (including councillors) ride around in their cars at 6o+p a mile and earn so much profit “on expenses” that they have to pay tax and national insurance on them

    2 The great scandal of amalgamated councils is yet to fully break however flavours are available

    Old chief executive salary £80K
    New Chief Executive Salary £110K (old chief executives remain in employment)

    Redundant buildings identified for sale ? er no

    Duplicate managerial staff identified for redundancy? er no “Directors” (lol) of Recreation , Finance, Technical services etc are tripping over each other all at tax payers expense

    Your rates bill is about to go through the roof —not JUST SF but they sure have been a big “contributor)

  • jimbo

    On the basis for your view of the Republic of Ireland. You seem to imagine that there is some sort of mysterious hidden majority who want an all Ireland. It’s clearly and demonstrably not true.. People in Northern Ireland want to remain in the UK. People in the Republic don’t want Northern Ireland.

    But back to the point of this thread. Northern Ireland needs to sort out its own economy. The awful UK government has given NI politicians from all sides the chance to control its finances and what does it show us. Your panacea seems to suggest that in an all Ireland all the issues would be solved… sad.

    Im sure you must already be voluntarily be paying you 41% tax rate into the Dail.also your 23% VAT into the pot. And don’t forget your €50 into the pot to visit the doctor. Don’t forget to start saving up to tax your car

    The world dosnt revolve around the partition of Ireland and it’s not the cause of bad economics. The English don’t really care what happens the Republic don’t want us. The last thing they want is a million prods voting for Irish president and probably the biggest party in the Dail.

    We’re in Northern Ireland now and we’re in the UK for the foreseeable future. So holding out the begging bowl and blaming the English isn’t going to fix it. Welcome to the real world

  • Jag

    “All countries must balance their budget (either with the assistance of loans or not)”

    Ah, now comrade, are you not being a little disingenuous there? In the long run, all countries must balance their budget [FULL STOP]

    If NI is a “country” rather than the statelet, territory, or temporary off-cut from the rest of the island, the NI needs to balance its budget without bailouts, loans and suchlike.

    Or perhaps you’d prefer to be an economically dependent waif all your life…

  • Comrade Stalin

    Ah, now comrade, are you not being a little disingenuous there? In the long run, all countries must balance their budget [FULL STOP]

    I am not the one who is comparing Northern Ireland to an independent country.

    If NI is a “country” rather than the statelet,

    But it isn’t a country. So how does that line even work ?

    I don’t care what you call Northern Ireland, but it is no more a country than Yorkshire, or the Shetland Islands, or Limerick. You can’t draw a line around part of any country and then say that this proves that the maths are wrong.

    You are economically illiterate and you don’t understand what you are talking about.

  • Comrade Stalin

    But we already know the starting point, which is that NI requires a £10bn subsidy.

    If you want to say that the number could be off by a few billion either way, that might be fair enough. But what you are doing is denying that there is anything wrong with Northern Ireland’s economy and denying that it requires revenue transfers from the UK.

  • Old Mortality

    ‘It is the firm will of the Irish nation….’
    How much polling did they do to substantiate that assertion? I think you would probably find the ‘firm will’ of the Irish nation is ‘maybe, but not now’

  • Croiteir

    Again you go with some unreferenced opinion polls about a united Ireland which mean absolutely nothing until a true poll, via the secrecy of the election box. Again I double dare you to go for a referendum to check your assertions. Opinion polls, unless they are regular and have unloaded questions, are meaningless unless the are taken regularly and have a consistency which is evident. And that is for any side.
    And even then it is irrelevant, even if the south did not want reunification does not stop us in the nort’ campaigning for it and sabotaging the nort’ from within whenever we can. That is a political reality you will have to deal with, and it is aa legitimate one too.
    We in “Northern” Ireland need to sort out our economy, well it is not my economy, I might live in the north but I do not belong to it so nothing attributed to it is mine. Not even the soccer team.
    Do I think all issues will be solved in the South – of course not. But I believe it is better to be part of a vibrant economy than one that has been in consistent decline since partition.
    I am not paying anything to the Dáil and I try to pay damn little to Chequers in spite of the begging letters from the English usurper queen, but I would much prefer avoiding the Dáil tax system any day and have a better quality of life and better opportunities for my children which being free of the English economic cycle would afford.
    I am sure that the world does not revolve around partition and neither does it revolve around the cause of Ulster either so I cannot see the relevance of that particular contribution.
    And again you go as if I want to fix the disaster that is the portioned state. I don’t, I want to deepen the economic disaster that it has been since it kept its links with Britain. I want the place to fail.