“I think [UK Government] will take the power [of welfare] back themselves, I think they will legislate for it”

Domino CascadeStop to draw breath in Northern Ireland politics and someone sneaks out and tinkers with the chain of teetering dominoes.

To be fair the Stormont House Agreement dominoes were falling quite smoothly until the Monday morning after Sinn Féin’s ard fheis when their U-turn on welfare reform was announced and the party stuck a hand out and took a few of the black oblongs off the table and stopped the sequence.

Arlene Foster – on her first day in her new role as Finance Minister – referred to a “nuclear” scenario if the parties could not agree about welfare reform. The BBC explain:

Mrs Foster told the assembly that the budget is predicated on welfare reform being implemented half way through this year. She said if that did not happen, the Treasury would rpe Stormont’s departmental budgets by £114m. She added that other factors mean that “at the moment because the Stormont House Agreement has not been implemented… there’s a £500m hole in the budget”.

Mrs Foster said there were “around two weeks to deal with this matter” which is a “very short window of opportunity”. The minister said that after that there would have to be “contingency planning” which could involve the top civil servant in the Department of Finance taking over the budget. Mrs Foster said that scenario would be “pretty nuclear.”

“The financial package secured as part of the Stormont House Agreement paved the way for executive agreement on the 2015/16 budget,” she said. “However, in the absence of progress on welfare reform, we simply do not have a workable budget. Delays in implementation will undoubtedly have a significant impact on departmental budgets and would necessitate further cuts to public services.”

Prof Cathy Gormley-Heenan explained after lunchtime’s Ask the Campaign Insiders event that the decision to un-devolve welfare is not in the hands of the NI Executive. Northern Ireland can’t sweep these dominoes off the table … unless they want the entire Executive to fall. Welfare cannot be given back voluntarilty.

Instead, the Westminster Parliament alone has the power to reach across to NI and scoop up the wobbling pieces of devolution and take back control of welfare though simple, rapid and fairly humiliating legislation. This evening on Inside Politics, Peter Robinson has clarified how this controlled repatriation of powers could be achieved.

“Sinn Féin have to take a decision, that they are going to cut half a billion pounds of the budget in Northern Ireland, or else address the issue of welfare reform, there’s nothing in between,” he said.

When asked if the collapse of the Executive was a realistic option, Mr Robinson said: “I don’t think the [UK] government will allow that to happen, I think they will take the power back themselves, I think they will legislate for it.”

Whether first suggested by Arlene, Theresa or Peter, the threat to Sinn Féin is there. Get back to the negotiating table to sort out welfare reform or else London will take it out of our local hands and implement what they see fit – most likely a deal much worse than what the local parties could agree to in order not to take into account local circumstances.

Of course, whether the DUP explicitly agree that London should take back control of welfare, or whether they implicitly nod and turn their head the other way while it happens, the inability to work together with their partners associates in the NI Executive will clearly weaken the DUP’s hand when looking for side deals to pay for their support of any Tory motions in Westminster that rebel back-benchers succeed in undermining.

While the NI public don’t want public services to suffer, the DUP also runs the risk of finding out whether the public would reward parties that cannot come to a consensus, and whether they would lose voter trust with May 2016’s Assembly elections not long around the corner. Will voters impacted by Westminster-imposed cuts to welfare benefits – and no longer with an NI-funded safety net to compensate for the worst of the changes – reward the DUP at the next election? Or will they vote for anti-austerity parties to punish the DUP for looking the other way and letting Westminster rescue the otherwise-collapsed Stormont structures.

Plan B isn’t too palatable to the public or the parties. Everyone suffers from the ‘nuclear’ fallout. Instead it would be better if the players could regroup around the table and start setting the white-spotted dominoes back on the table and find the political maturity within themselves to come up with a compromise pattern that allows political processes to get back on track and avoid paralysis in the lead up to May 2016’s elections.

Of course then while we draw breath at the end of that panic, the Chancellor of the Exchequer  will sneak a few more dominoes onto the table in the name of a further UK budget with austerity cuts to welfare … and we’ll start the whole process again.

Domino image from Nauticashades

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  • Zeno

    “I think [UK Government] will take the power [of welfare] back themselves, I think they will legislate for it”

    It would get SF off the hook and somebody needs to.

  • USA

    Do you support the cuts Zeno?

  • Pasty2012

    The DUP Demanding the British Government Break an International Agreement because the DUP as one of the warring Party’s in the country can’t get welfare cuts as deep as those in Britain introduced by the other warring party (Sinn Fein) is a very sinister move. If the British Government break the agreement then why would any other country believe they would honor any agreement that they had with the British?
    Both Party’s have agreed to all of the pieces of the settlement Agreement and if they can not agree on one issue then they just have to spend less on all the other household outlays they have and leave it to the electorate next year to decide who should be returned.
    The DUP seem to be crying for the British Government to take the ball off the other boy and give it to them. The Scottish Nationalists are demanding more powers to run their own Welfare System and instead of joining with them on that the DUP are hell bent on bringing suffering to the people in the North and at the same time trying to blame others for what they want them to do.
    Where ever the cuts are to be made the Party’s here have to decide where to cut and then stand in front of the electorate and take the blame.

  • Dan

    No point wasting another fortnight. Take the powers back now and implement the changes immediately.
    …then set about closing Stormont down as the parties are incapable of taking any decision which doesn’t involve smiley photographs and.good headlines for themselves.

  • Sergiogiorgio

    Yep – Stormont does not function. Time to reapply the stabilisers and let the pieces fall where the will. The DUP’s and SF are playing to their respective galleries, so let’s call their bluff and let the real politicians/civil servants take over.

  • Zeno

    I’ve no idea. I don’t know the details of what will be cut.

  • Reader

    Patsy2012: Where ever the cuts are to be made the Party’s here have to decide where to cut and then stand in front of the electorate and take the blame.
    The scenario discussed above is what happens whenever the parties here *don’t* decide – then someone else has to.
    And that isn’t a breach of any international agreement, either. It’s simply plan B.

  • Reader

    Do you think the lack of money can be wished away, USA?

  • Some tweets from @cathycgh that point to the Cabinet Office advice on devolution, sovereignty and pondering whether NI’s welfare situation would fall outside “normally” …

    https://twitter.com/cathycgh/status/599481774733959168

    https://twitter.com/cathycgh/status/599483046463692800

  • Jag

    It’s nearly six months since the Stormont House Agreement. When are we going to finally call a spade a spade, and conclude that we can’t fit a gallon in a quart jug. Budgetary constraints being imposed by Westminster will lead to unacceptable cuts to public services (there just isn’t that much waste and inefficiency there and even if there was, the shower up at Stormont wouldn’t be able to tackle it) and/or cuts to social welfare.

    How the NI parties have managed to keep these balls in the air for six months is remarkable, but Westminster is now in safe Tory hands for five more years. If the NI parties won’t agree the cuts (which they won’t) then the Tories will dictate the detail of the cuts.

    And if SF intend using the beastly Tories in Westminster as a defence to the inevitable criticism of two-facedness in the Republic, they have another thing coming. Their critics will credibly point out that SF just can’t balance a budget – at least FF did retain some sovereignty during the IMF bailout, there’ll be no sovereignty at all in NI if the Tories are dictating line-by-line of our budgets.

  • Pasty2012

    All Very Good to the point that the British Government would then be acting against the wishes of the people, after all the People in NI elected the Assembly Members and it is therefore the WILL of the Elected Assembly that the British would be over riding.
    A Type of Democracy maybe, but against the Will of the people and the Rules of the Governing Assembly. Maybe return to the Anglo Irish Agreement and Articles 2 and 3 is what the DUP want. And whilst the British are for taking powers back to move things on then the Irish Language Act that the British Government agreed to should be implanted at the same time in order to deliver a type of “Fairness” or “keep up the Arse” to both sides ?

  • NMS

    The focus here is on SW cuts, but this may be only half the story. The Guardian are running this story http://www.theguardian.com/politics/2015/may/16/george-osborne-july-budget-austerity-conservatives-deficit, which suggests the next round of cuts as Alan notes

    “Of course then while we draw breath at the end of that panic, the Chancellor of the Exchequer will sneak a few more dominoes onto the table in the name of a further UK budget with austerity cuts to welfare … and we’ll start the whole process again.”

    are not too far away. In effect the NI administration will be required to introduce a second round of welfare cuts at the same time as the initial adjustments.

    The other problem is that the current assumptions on growth may not be met, requiring a further set of downward adjustments in spending. Private sector activity in NI is already reported as having stalled http://www.bbc.com/news/uk-northern-ireland-32658945 and the current level of sterling, particularly against the Euro, leaves NI even more exposed.

    The SW issue may end up being just one intractable policy problem among many. The Executive may end up having to take much more drastic action in a desperate efforts to balance spending and income. One issue that will have to be considered is surely cutting Public Sector pay. If the income per capita is just two thirds of England, can pay in a devolved structure remain the same? Reducing pay levels is fraught with difficulties as Ireland has discovered. A 15% cut in pay is likely to see those with tradeable skills, particularly in the Health area, leaving en masse

    Martin Wolf, in Friday’s (15/5/15) Financial Times summed up the contradiction as US tax & expenditure levels, but a demand for a European level of services from the Public. Northern Ireland, as a regional economy dependent on high levels of spending, is caught. There is a delicious irony in the Executive wanting to cut (corporation) taxes. I wonder do many of them see it?

    The alternative of a “united” Ireland is perhaps even worse. By 2020, the OECD expects Ireland to have the lowest level of Public Spending as a proportion of GDP in Europe.

  • chrisjones2

    Take back all the powers. They arent able to manage them

  • chrisjones2

    “unacceptable cuts to public services ”

    The problem is that SF have lied to their electorate and and now strung up on their own false promises.There are two options

    1 Westminster take back the powers and do it – which SF will sue to scream “Evil Tories”

    2 Westminster sit back and force them to make the cuts throwing services into disarray and then make sure the blame falls in NI

    Guess which they will choose?

  • chrisjones2

    “the people” then want to be able to demand far more money than ‘the people’ elsewhere in the UK because they dont want to make reasonable savings. In that case – tough

    They have two choices – cut other services to the bone to subsidise SFs client group or elect new politicians who can manage.There is no more money – indeed read the Chancellor’s statement – there will be a lot less after July.We are to have a new emergency budget focused on ‘working’ people – not those on benefits

  • chrisjones2

    I support living within our budget

    Do you support paying 19 year olds more than they can earn in work to stay at home on benefits?

    Do you support a system where having children to be supported by the State can be regarded as a lucrative occupation?

    Do you support a system where a 60 year old couple whose children have all moved out years ago, living in a public sector provided 3 bedroom house can refuse to downsize and block a young family from getting a home with the space they so need?

  • chrisjones2

    Why?There comes a time when they need to say that SF have to grow up or be exposed as laying to the people. In the face of Assembly and Irish elections next year and with SFs vote having peaked now looks like a good time for some realpolitik

  • Catcher in the Rye

    I’m not sure that the UK can legislate to take welfare powers back. There has to be a consent motion in the Assembly, and that won’t pass if there is a petition of concern to stop it – which there would be.

  • Catcher in the Rye

    I think “normally” may well be there for cases such as this ..

  • Old Mortality

    Westminster was largely responsible for the growth in dependency during the period of direct rule (as was SF through the economic damage wreaked by the IRA and encouraging dependence on social security as a means of building a political base). The problem should have been tackled ahead of devolution but phoney Tony was more interested in feeling the ‘hand of history.
    It is, therefore, only right that Westminster should acknowledge this responsibility and take back control of social security which, for the moment, neither of the other devolved administrations hold. The Irish government should give its full support.

  • NMS

    OM – Northern Ireland never paid its way, there was always a subvention. While the Provos did not help, they turned a bad situation into a catastrophe, but there were deep problems before that. There was a consistent lack of investment and dare I say it, discrimination.

    Blair “bought” peace, yes. No arguments, there, but using a pejorative term like “phoney”, I don’t think is fair. The arrangements were made in public and I don’t remember too many people complaining at the time. The problem is that they were allowed to continue indefinitely under Brown and particularly Cameron.

    The increasing rate of SW dependency is related to a lack of investment and a lack of emigration options for the unskilled. Investment involves the deferral of consumption now for improvements at a later stage. The electorates are like five year olds, they want instant gratification, which all parties have supported.

  • disqus_JmCoqa6yB8

    Sinn Vein have lied to their supporters for years their conundrum is how to pretend to be anti welfare cuts whilst hanging on to Stormont. SF need Storming to oil its party machine for next year’s elections they can’t risk asking party workers to return to the old ways of no pay. Their select 200 or so ” party full timers” will not want to give up the £27,000 ‘ average industrial wage’ and go back to the dole or the black economy. No doubt the party spin pins are working on a form of words to get them off the hook whilst remaining on populist wave of ‘anti cuts’ . After all they have sold their members and support base bigger whoppers including IRA decommissioning. There will be little dissent as it is not tolerated.

  • Zeno

    The British Government helped put them in power and will probably prefer to keep them there for the foreseeable future. It keeps them off the streets.

  • Reader

    Then if “the people” want to spend more on all the good things that can be provided by government, then “the people” need to raise a few more local taxes, and recover a few more local costs. Our local politicians seem to want better welfare and public service provision than in the rest of the UK; and lower taxes and charges.
    At least the Scottish politicians have recognised that the gap has to be filled by local tax raising powers. Our lot don’t seem to have worked that out.
    And while an administrative takeover of the areas that our politicians just can’t manage is quite a proper thing; I share a little of your suspicion that the two most irresponsible parties in our little playpen will be made aware that they are to go onto the naughty step at the same time.

  • Sergiogiorgio

    Northern Ireland is the heroin addict of the UK. Ever more handouts and ever less contribution. The Stormont buffoons focus on keeping us’uns in and themmuns out. Forget the economy, health service, education when there are parades to be disputed or football stadiums to be investigated. Avoid the tough choices and keep your head in the sand.

  • barnshee

    “OM – Northern Ireland never paid its way, there was always a subvention. ”

    Incorrect in the very bad old old days NI budget balanced or was in slight surplus

  • USA

    That’s evasive Zeno. So you don’t have a position on the economics of austerity? We know significant amounts are being cut with more to come. Do you support this or just oppose Sinn Fein?

  • USA

    No I don’t reader. But here, following the economic difficulties of 2008, we engaged in a policy of economic stimulus rather than austerity. The US seems to be recovering better than those who adopted the austerity approach.
    Also, I would have concerns about the effect of significant austerity cuts on such a small economic area. There are also large numbers in public sector employment, cuts in this area would have a detrimental effect on the local economy. And while i’m on the topic, I don’t see the reduction in corporation tax bringing all the benefits promised by some local politicians.

    So Reader, what are your thoughts on the economics of austerity?

  • USA

    1.Of course I do not support a system where it pays more to stay at home than work and contribute to the tax base. But there are two parts to the equation. On the other side there must also be job creation and employment opportunities in the economy for all (not just 19 year olds). If your economy sucks (conflict, parades, the past etc) then you are going to have high unemployment.
    2. Again, of course not. But blaming young parents or single mothers is probably not the answer. I disagree with you that these people are the cause of your current economic woes. These folks pose a much smaller burden on the economy than other factors. And it could do you no harm to address a culture of dependency. However, it is more likely the wars recently put on the country credit card are contributory factors, or Trident expenses. Or how about your inability to attract hundreds of millions of dollars each year to your specific region because some people insist on marching around and fighting in the middle of tourist season?

  • Pasty2012

    Chris, you seem to be making a difference between ‘Working People’ and ‘those on benefits’? The Majority of Working People in NI are on Benefits, with large numbers not only working for the NICS but also claiming the ‘Working Tax Credits’ (Benefits) to make up their income, an income which is now going to be cut further. Many people in those jobs will then not be able to continue to work in them due to the costs of travel they have to pay. The economy in NI has stalled and this will push many many families into real poverty. Unlike other places people in NI can’t live where they want they have to live were it is safe and may not be able to take up jobs due to location.

  • Reader

    But in the US the borrowed pump-priming money wasn’t spent on welfare, was it? In fact, the nearest anyone here has approached a plan for kick starting the economy is the corporation tax plan – which you don’t like.
    Where we are right now, local politicians are faced with a decision – cut the public sector, or cut welfare. If you really do want an “economic stimulus”, where is the money better spent?

  • Pasty2012

    Just a little point on this, the DUP and UUP MLA’s and MP’s each “employ” their own (or now their colleagues) wives and children to be “Advisor’s” and office staff earning well over the industrial wage. There is no room in the DUP or UUP for outsiders, no advertisements in the local community of those cushy jobs. Some DUP family circles have well over £250,000 while they cry out for cuts to be unleashed on their voters? but apparently the Union Status (which no one was voting on) is safe so the cuts are well worth it – and those DUP/UUP voters on benefits are more than happy to now pay.

  • Old Mortality

    NSM
    The figures which I have been able to find, don’t suggest that NI’s subvention, if any, was on anything like the scale it has now reached. Much of that subvention was due to legislation on health and social security originating in Westminster and which the devolved administration in NI might have preferred to implement. Some of it was inappropriate for local conditions, notably the 1966 Social Security Act which introduced a needs (or demands?)-based system to replace the contributory one. In a region where people were disposed to having larger families, it was bound to price a significant number out of employment and create large ghettos of dependency like West Belfast.

  • Zeno

    Tell me the details of the cuts and I’ll give you an opinion.
    I do oppose SF/DUP/UUP/SDLP and the rest.

  • NMS

    Barnshee – The Colwyn Formula, an early version of the Barnett formula!, set a sliding scale for contributions to central services. In effect, the contribution to those central “Imperial” services as they were called then, melted away to nothing. In effect NI made no contribution to the running of UK controlled services. However, by 1926/27 the Unemployment fund had to be topped up. Little has changed since. Funding of the limited levels of SW assistance was an issue right throughout the 1930s too.

    It is interesting to note that the cost of SW was an issue from the creation of the entity known as Northern Ireland!

  • NMS

    Serge – It is a common factor in all States that long-term investment is now a huge problem. It is very difficult for politicians to get the public to understand the need for capital spending for the long-term involves short-term sacrifices. The “bread and circuses” routine goes back to Roman times. Remember the “mob” were citizens with the right to vote! The Senators needed their support come election time. The major problem in NI is that one of the two main parties regard the current regional arrangement as a “temporary little arrangement”. As such keeping their “mob” happy becomes the only imperative.

    UK & Ireland both have very poor levels of State investment. With the Irish Exchequer likely to move into a current Budget surplus this year, it at least can start making the case for capital investment to the European Commission in tandem with debt to GDP reduction. The UK model seems now to be driven by a mad idealogical move to the right. The most basic capital investment is in human capital. The cost of 3rd Level education is being switched from society to the individual and will increase further with the new Government, the options for many will be curtailed.

  • NMS

    OM – From day one, financing of the Northern State was an issue. So much so that an early version of the Barnett formula was put in place – the Colwyn formula. This involved a sliding scale of assumed contribution to central services, falling to almost nothing. Yes, you have hit the nail on the head when you mention Social Welfare, or the Unemployment Fund, which was the main expense pre -1945. The NI Unemployment Fund was first bailed out in the tax year 1926/27. In 1936 there was a restructuring of the arrangements by way of the Unemployment Insurance Agreement. State spending pre-war was of course much lower than it is now, ignoring SW spending, is wrong.

    Making payments at the same level as GB was always going to be a problem. Post war switching gave a veneer that NI could pay its way – but only once the big expenses were paid by someone else.

    Remember in the Free State, the dour Ulster Presbyterian Finance Minister, cut 1/- from the Old Age Pension. This was just a 10% cut, though Free State GDP per capita was only two-thirds of GB and the pension had been maintained at that level post-treaty. (There was no inflation in 1920s). The shilling was returned later, but his name is still associated with that cut.

    NI authorities never wanted to make hard decisions, unless of course they hurt the “other” side.

  • Slater

    Social security and pensions should have been put back to Westminster in 1998 by Trimble if he wanted parity to remain in place knowing that devolution is a process of unravelling a unitary state until it collapses.

  • USA

    Another evasive answer. So you have no opinion on austerity, stimulus, budgeting, economic priorities etc?
    Let me help get you started…governments collect tax revenue and we know the departments that recieve the tax revenue disbursements….

  • Zeno

    I’m not evading anything. I don’t know the details of welfare reform and can’t give an opinion. I do have opinions on economic matters when I am aware of the details. I am against cutting corporation tax and against borrowing £700 million to cut 20,000 local jobs.

  • USA

    Money was spent here on infrastructure improvements (mostly roads) to keep people in work following the housing / construction crash. There was mortgage relief to shore up the housing market. The Feds even sent every tax payer a refund to stimulate consumer spending. I remember getting a $1,000 back. There were no end of programmes at the time.
    PS. I like the corp tax option, but i am not sure it will be as successful as some might hope because you don’t use the Euro.

  • Jag

    Doesn’t SF do the same? And if you’re a SFer SPAD, do you hand over to the party that part of your salary which is in excess of the average wage?

    And what’s the position at the SDLP and Alliance?

    More generally if you are employing a special adviser, is it not reasonable to verify that they will be loyal to you and not act against your interests in favour of a rival politician or political grouping?

  • Kevin Breslin

    Would they also take back the power to legislate for equal marriage, blood donation, adoption and even abortion, as well as solely determing the relationship with the Republic á l’Anglo-Irish Agreement?

  • barnshee

    In short there are way too many people in NI
    A cull is required as pain free as possible but a cull nevertheless

  • disqus_JmCoqa6yB8

    Blair bought peace and SF took to it gladly realising quickly massive scams for expanding its war chests. Both Labour and the last government turned a blind eye to SF ‘ dodgy financial practices’ because the money has helped to pay to expand the party machine.

  • USA

    Fair enough. Have to respect an honest answer.

  • NMS

    JM – Yes, spending was ramped up on “community projects” – in loyalist controlled areas and republican controlled ghettos and violence went away. But I still don’t remember lots of people decrying Blair’s settlement at the time.

    I suppose the difference between the Provos and the various loyalist groups was the “democratic centralist” model that SF adopted and internal discipline for the most part was maintained. The Loyalist groups have disappeared into a twilight zone of activities, which we won’t mention here, lest Mr. Fealty gets some legal correspondence.

    Centralised control of spending has ensured that the receipts have been sent on developing their organisation. But, it was open to Mr. Blair’s successors to reform the structures. It is eight years next month since he resigned, it is about time people considered what those after him have done or not done. Paying people massive expenses for not attending Westminster probably does not make sense anymore. However I think you will be waiting for an intellectual pygmy like Cameron to do anything about it.

    However, lets get back to the real issue – welfare cuts and the state of the economy – not peripheral issues such as overly generous expenses structures. These are symptoms not the causes of Northern Ireland’s problems.