The voice at the parlour door and the looming NI cuts

My dad tells the story of a TV or radio drama broadcast decades ago while he was living in Dublin.  The protagonist’s wife gave him some of the food – special “party bread” – she had prepared for a gathering of some friends, on condition that he kept out of the way and didn’t embarrass her – that he would disappear until they were gone.

Later that evening there was a voice at the parlour door.

“Mary, bring me some party bread… or I’ll appear!”


I have a theory.

The Executive successfully negotiated in 2010-2011 for the promised cuts to NI’s block grant to be backloaded – essentially to borrow from future years’ block grants to ease the pain of the cuts being enforced by Westminster.  A budget was devised and agreed on this basis, without resorting to inflationary rises in the domestic regional rate.  It was known that Westminster intended changes to welfare benefits, and funding for these is inevitably predicated on how much it would cost to pay the same benefits as in GB – thus the so-called fines.  Further cuts to the block grant for 2015-16 had been signalled in June 2013.

That, without getting into rights and wrongs, is pretty much where we were pre-Stormont House.  The Treasury had no desire to hand out more money and was quite probably wondering why we didn’t introduce water charges, increase the regional rate, or both.  Any attempt to give NI more money would fall foul of Scotland, Wales and regions of England who have suffered similar cuts but at the outset, not delayed.

Then the voice at the door.  Party bread, or they’ll appear.

I see Stormont House as a fudge.  A little new cash, but mainly loans to see us through.  The ability to sell assets to fund corporation tax cuts.  Bridging the gap between welfare reform and the funds needed to run the present welfare system until it’s implemented.

My theory is one of brinksmanship.  Avoid planning for future cuts in the hope, however vain, that there will be a change of heart and more cash will be provided, and perhaps a crisis to force the issue.

When the next difficulties come, perhaps when they realise that selling Belfast Harbour will only pay for a corporation tax reduction for one year and the cupboard will be empty again, can we expect another political crisis?

Maybe, maybe not.  The elephant in the room from the beginning has been that however much Sinn Fein, my own trade union, and others may deny it, NI does not have and never has had the power to force Westminster, whether in the form of the Treasury or in the persons of the Prime Minister, the Chancellor of the Exchequer and the Secretary of State for Northern Ireland, to give us more cash.  Realistically, the only hope of successfully fighting the cuts is at a national UK-wide level, and there is little or no incentive for the new Government to acquiesce and change its plans, not even in 2019 as the next election draws close.

The real danger is that Westminster will tire of people coming to the door and threatening to appear, and will invite them in to reveal that the party bread is all gone, and then tell them that’s it – take what they’re given, or be booted out for Direct Rule ministers to take over, introduce direct water charges and probably also increase the domestic regional rate (besides passing several other pieces of legislation the Assembly has avoided or rejected – and some anti-Agreement parties would be most displeased to see enacted!)

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  • chrisjones2

    What do you mean by ‘threaten to appear’ .In the play the character has the ability to embarrass and disrupt. Here – unless they return to war – SF dont

  • AndyB

    It was a reference to the Executive in general, not to one party in particular. With the Executive knowing in advance what the block grant would be for 2016, I perceived a failure to prepare for the cuts – indeed, to act in advance for a softer landing, which was not helped by having the cuts backloaded over the last parliament, and reflects that Welfare Reform is only a small part of the budget issues.

  • Old Mortality

    Andy
    A very fair and succinct analysis. It implies that SF will probably pull out of the Assembly rather than be seen to implement ‘Tory cuts’. However, they might well take tacit political comfort from the subsequent imposition of undiluted welfare reform which might renew enthusiasm for Irish unity among the mendicant classes as well as making it more difficult for Dublin to resist on grounds of expense. If I were a true-green nationalist, I would be salivating at the prospect.

  • AndyB

    It’s not just SF, to be fair. One of the DUP’s aims in their blueprint was to screw more money out of Westminster, both as a post-troubles premium and to avoid increasing the rates.

  • AndyB

    I should also have said that there was circumstantial evidence in the DUP’s five point plan – an intention to demand extra cash from Westminster to deal with our special circumstances and to keep the lowest household taxes in the UK.

    I like having the lowest household taxes in the UK – I live here after all! – but most council tax payers in GB would be jealous of our typical rates bills, and I don’t think increasing the block grant while taxes were cut was ever going to happen.

  • Are Westminster and the unionist side of the Executive and Assembly intent on creating more “Troubles” which will next/this time target them personally rather than the public generally, for a lot was learnt by many from the mistakes of the last time?

  • AndyB

    I don’t think so. It’s in the interests of both the DUP and SF to keep the Executive afloat.

  • The law of unintended consequences allied to the ire of a disenchanted populace should not be misunderestimated, AndyB.

    There is always money from nowhere for warfare so why not for welfare, is a question which is always avoided. Oh, and money for insolvent banks to continue their shenanigans too. Things are worse now than they ever were before, are they not?

    Who has benefitted over the last number of years tells you all that you need to know about the games in the Great Game being played and playing societies as the fool to be taken advantage of, and hopefully, extraordinarily rendered practically powerless and virtually useless.

    Don’t be putting any money or something of value on that hope being fulfilled though, for it is the Grand Master of Follies, to be sure, to be sure.

  • Old Mortality

    Andy Of course the DUP would, but the truth is that a period of sustained reduction in public expenditure would be good for the union as well as for unity. Maybe the DUP are too short-sighted to appreciate this.

  • Brian O’Neill

    On a related note http://www.irishnews.com/business/-get-corporation-tax-new-minister-urged-1453564

    “THE north’s new enterprise minister was urged
    last night to “get corporation tax” as a matter of priority. Strangford
    MLA Jonathan Bell (45), previously a junior minister at Stormont, was
    elevated to the top post in the Department for Enterprise, Trade and
    Investment as part of a DUP re-shuffle – and he’ll have an overflowing
    in-tray this morning.”

    There is no way on earth they can now cut Corporation Tax in NI. ‘Let’s cut hundreds of millions of benefits and give it to businesses’ will go down like a lead balloon with the public.

    Disagree? Have a read of http://sluggerotoole.com/2014/11/03/why-lowering-the-corporation-tax-rate-might-be-the-biggest-mistake-stormont-ever-makes/

  • AndyB

    Oh I know. That’s the other elephant in the room – we have no power to change the Tories’ spending priorities. I wish we did.

  • AndyB

    A social liberal like me would disagree, but I also firmly believe in balancing budgets over the cycle, albeit by increasing revenues rather than cutting spending!

  • Is that akin to Direct Rule from Westminster by the back door which effectively renders Stormont an expense riddled sham and scam …… which is then, in all truthfulness, a fraud perpetrated on and against the electorate which imagines and expects things otherwise?

  • This is how it simply works nowadays, AndyB …… but it is fraught with vulnerabilities to exploit and flash crash systems with.

    Permit me to issue and control the money of a nation, and I care not who makes its laws. …. Mayer Amschel Rothschild

  • AndyB

    Westminster only decide what gets spent where in Northern Ireland at a very high level – ie block grant to the Executive or direct funding of the remnant of NIO. Distribution between transport, schools, hospitals etc is within our gift, as is the ability to raise additional revenue through the regional rate. Actual priorities during past periods of Direct Rule have suggested to me that spending profiles under new Direct Rule would be different, partly due to less borrowing.

  • AndyB

    I agree, but Middle England has voted for tax cuts to the rich and spending cuts to everyone else since 2010.

  • After listening to Stephen (the biggest show in the country) Nolan this morning, I am wondering if Sammy Wilson and colleagues knows of the role played by quislings and if they are happy to cause that thought to be shared about their capitulation to austere imposition forces?

  • Zeno

    You only have to look at the people begging for Corporation Tax to be cut.
    Is it Global Companies keen to invest here? No.
    Is it left wing socialist parties? No.

  • Dan

    Let’s cut funding to those 63 ‘community groups’ which expressed sympathy on the death of the terrorist, last week,
    There’s a few million saved immediately.

  • whatif1984true

    From the Sinn Fein Dossier of Facts http://www.sinnfein.ie/files/2015/Welfare_the_facts_SF1.pdf

    “The civil penalty for people who deliberately submit false information
    when making a claim for social security benefits is not introduced”

    Who thinks that those defrauding us should be allowed to get away without penalty. Which parallel universe are we all on?

    The new benefits scheme is now very unlikely to be withdrawn. Whilst one can debate the elements which squeeze the needy and deserving and who is actually needy and deserving, there is a change in it to allow claimants to work more without having to halt their benefits and to allow them to receive more from their transitional move into further employment. In all the discussions to date I have missed what will happen to those who will get more from the new system. To halt the clock on decreases but to add on increases is a great double. Ultimately the money can only come from those who work.

  • Dan

    Looting the public purse is what Sinn Fraud are all about. It’s what a mafia does.

  • Old Mortality

    Andy. I think we’re at cross-purposes here. I was looking at it in purely political terms: whether it is good for the union or good for the prospect of a united Ireland. I think it’s better for both but probably indispensable for a UI in the foreseeable future. I can’t believe that this hasn’t dawned on SF but perhaps I am over estimating them.

  • chrisjones2

    Thanks. You had me worried!

  • chrisjones2

    Is that really true? The Treasury can also say, “if we give you X what will you do with it ?” and if they don’t like the answer they need not give the full amount. Barnett can be made conditional

  • whatif1984true

    So far as I understand this the DUP have also agreed to this as part of the deal they all brokered.
    The whole assembly seems lunatic if this was agreed by all or most of the parties – including UUP and SDLP.

  • Dan

    I wouldn’t be surprised. With such an industry of DUP family and friends employed and depending on Stormont, that shower would agree anything

  • eireanne

    Andy one curiosity

    You said you “liked having the lowest household taxes in the UK” – Fine – could you please answer a question arising from your statement?

    How do your household taxes compare to a similar household in the republic of ireland? Would you pay lowest, middling or upper household taxes there? Any idea of how much you would have to pay? of the difference, if any? Thanks for any comparative info you can provide. It would be much appreciated in creating a holistic picture

  • disqus_JmCoqa6yB8

    So true SF needs Stormont for a number of reasons: to pay for the upkeep of the party machine which in turn keeps all their ‘ favourite members’ on board. Apparently over 250 SF members including MLA’s, advisers, drivers, area organisers, researchers and others on the ‘average industrial wage of £27,000 a year’ How many average industrial workers in NI earn £27 k ? SF never want to talk openly and honestly about this issue. It’s a convoluted way of grabbing public money to pay scores of people many of whom with no qualifications a salary that many professionals and highly educated people would be glad of.

  • AndyB

    Chris, that’s only true for earmarked funds. Once statutory requirements, ie things that legislation requires them to fund, have been met, they can spend the rest of the normal block grant on any lawful purpose within the powers of the executive.

  • AndyB

    It probably did a long time ago. “Look what the nasty British are doing to us against our will!”
    The logic of my piece was broadly that just because the DUP want to get welfare reform out of the way as they can’t win on it doesn’t mean that a related political crisis wouldn’t be extremely convenient to ask for more cash – but my call was and remains that Westminster is going to stop even giving them loans to go away – and that would have happened whoever became Prime Minister last week.
    The danger for the DUP is that while they can try saying “Look what themmuns have done now” if it all falls apart, they will not be top of the Prime Minister’s list if he wants to push something through in the face of a backbench rebellion – the price will be too high.

  • AndyB

    Truthfully, I haven’t a clue. I believe that local government is directly funded by the Irish Treasury through central taxation rather than through rates, but that’s it.
    It would be interesting to know.