“Sinn Féin achieved a welfare system better than the one in Britain, by an average of £94m per year…” – Redux

Back in February 2015, this was Sinn Féin’s original line on the welfare cuts mitigation schemes agreed at the first Stormont Castle Agreement.

…Sinn Féin from 2011 onwards opposed the proposed welfare cuts and insisted welfare protection was absolutely fundamental for all citizens.

“That is why Sinn Féin politically campaigned against welfare cuts alongside trade unions and grassroots communities.

“This principle guided our strategy during the Stormont House negotiations and why, in December last, when the other four Executive parties agreed to a deal on welfare, Sinn Féin refused to do so and kept negotiating.

By standing firm against the London-Dublin Tory axis, Sinn Féin achieved a welfare system better than the one in Britain, by an average of £94m per year. [added emphasis]

That agreement would have seen funds diverted from the NI Executive’s Block Grant into the mitigating schemes over 6 years at a total cost of £564million.

When Sinn Féin subsequently reversed ferret, Martin McGuinness claimed that the deal struck at Stormont Castle was to protect payments made to present and future recipients of welfare in several categories – and that a further £200million was needed “to protect the most vulnerable in our society”.

The Irish News’ John Manley identified the problem

The nub of the problem appears to lie in the figures contained in the Stormont Castle Agreement, an agreement within an agreement negotiated between the five parties days before the final accord was signed off on December 23.

In annex A of this sub-agreement, the figures for the planned welfare safety net are outlined.

It earmarks £413million over the next six years for dealing with the transition from Disability Living Allowance to Personal Independence Payment.  A further £125m is allocated over six years for assisting those impacted by changes to other benefits, including the disability premium and the benefits cap – the so-called Supplementary Payment Fund.

However, whereas Sinn Féin appears to have previously accepted that £125m provided adequate protection, revised figures suggest it would actually cost nearly four times that amount if everybody – new and existing claimants included – were to be topped up to current benefit levels. [added emphasis]

This time, the DUP and Sinn Féin have only made financial commitments for the next 4 yearswhich allows the headline figure to read £585million “to ‘top-up’ the UK welfare arrangements in NI”.  [More than £564million! – Ed]  Indeed.

But the £585million includes a mitigating scheme for an entirely new category of cuts that was implemented elsewhere after Stormont Castle was brought down by Sinn Féin – in-work tax credits.

As the BBC report notes

The last Stormont deal included a mitigation package on welfare reform that amounted to £564m over a six-year period.

The new deal includes a four-year programme, with a value of £585m.

The cash will be split, with £345m for measures designed to mitigate the welfare changes.

The remaining £240m will be spent on measures to help families who will lose out on tax credits.

And £345million over 4 years works out at £86.25million per year on mitigating the same welfare cuts that previously Sinn Féin had, eventually, declared £94million per year was insufficient “to protect the most vulnerable in our society”.

For cover, they have invoked “a small working group under the leadership of Professor Eileen Evason” to handle the detail.

Here’s the relevant section of the latest Fresh Start [pdf file].

Executive Welfare and Tax Credits Enhancements

1.1 The Executive has agreed to allocate a total of £585 million from Executive funds over four years to ‘top-up’ the UK welfare arrangements in NI with a review in 2018- 19. This sum incorporates the present discretionary fund.

Year 2016-17 2017-18 2018-19 2019-20

Agreed Amount £135m £150m £150m £150m

Welfare £75m £90m £90m £90m

Tax Credits £60m £60m £60m £60m

1.2 The Executive will establish a small working group under the leadership of Professor Eileen Evason to bring forward proposals within this financial envelope (including administrative costs) to maximise the use of these additional resources.

1.3 The Executive has agreed to implement the findings of the working group within the financial envelope available.

1.4 Within the welfare funding set out above, it has been agreed that the social sector size criteria – the so called bedroom tax – will not apply, as agreed by the Executive.

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  • OneNI

    So SF stand off results in less money for Initial Welfare Refrom but secures some money to mitigate introduction of Tax Credit reform?

  • OneNI

    One short of gets the feeling that having gambled on a Labour win and lost this time SF are gambling on a Labour win in 2020!

  • barnshee

    It was them nasty Brits/Torys we held out as long as we could but them Tories just brought it in over our heads so they did. and anyway I might have lost my sinecure/important job

  • Well, ‘secured’ would be overstating it.

    The mitigating schemes in both cases are funded entirely from the same overall Block Grant.

    i.e. cuts to NI Executive Departments’ budgets.

    The cuts to Tax Credits would still have had to be dealt with if Stormont House v1.0 had gone ahead.

  • Robin Keogh

    A deal was done at the point of a sword, end of story.

  • OneNI

    But who was holding the sword?

  • Sprite

    I haven’t read the document but in the news reporting it said that Westminster would legislate to implement welfare reform and Stormont would apply mitigating measures. Does this mean SF have negotiated away the devolution of social security for ever?

    EDIT: I found the answer to this – it doesn’t. It seems getting the dirty deed done at Westminster is just a short term political fig-leaf.

    Interesting that the welfare deal is grounded on SSA identifying twice as much fraud and error than they currently do. I wonder how that will work out.

    My other reflection is that some of the vulnerable groups in our community may do less well under this deal – disabled people may be one. It’ll be interesting to see the details of these mitigation schemes.

  • notimetoshine

    I! Not sure I’m reading this right but if I am, are we going to see further service cuts to fund this softening of welfare reform?

    Because I really don’t see how that can be done (especially in health and social care) without really damaging provision of services.

    I don’t know about anyone else but I’m none too thrilled about the idea of public services being neglected in favor of welfare

  • mickfealty

    I’m not sure either. As David has pointed out on Twitter, we won’t know what sort of cuts in UC Osborne is planning, but you expect that subsidy to taper down accordingly. But otherwise, since the shortfall in Welfare is greater SF will either push for that (and be told to clear off by other ministers), or just let the deeper welfare cuts come on.

  • Gingray

    Not long until the spending review – next week I think, should give some indication.

  • David McCann

    Pete,

    If we factor in lost revenue through fines etc, how much better off would we be, if the orginal deal in 2013 had been stuck to?

  • whatif1984true

    In comparison to the money given to NI Executive before all this rumpus has the actual money given to the NI Executive gone up or down with this new deal.

    Is money that would have gone to other departments being diverted to welfare payments and if so which depts and what is being lost from those depts due to thheir loss of funding?

    Does anyone know or have the DUP/SF managed to bamboozle us all.

  • Noted that while there is less to mitigate the welfare reforms than previously, the mitigation of tax credits is in already, despite the fact that what shape review of tax credits will finally take is still in air until next week at earliest. So this is a punt on an unknown, and by the way all of welfare/tax credit is now being legislated by Westminster. Once confirmed today, SF will be handing this over into an unknown. And the consent for Westminster to legislate is SF consenting to ‘austerity’ as they would have described it last week. No spin out of that. Still six months to the next election and Credits etc probably not impacting until end of May. Might just get away with this one.

    No doubt, in this crisis round, SF blinked.

  • OneNI

    So SF are defending the vulnerable by cracking down on the vulnerable – marvellous!

  • Neil

    No spin out of that.

    Ye of little faith…

    “It wasn’t us it was the Tories”.

    Rinse, repeat.

  • Skibo

    Think you will find it was the SOS. Do the deal or she will take back welfare and impose the cuts. If that had happened you may as well close Stormont. If the SOS can take back elements of Stormont at will then devolution is built on sand.
    Need to sit down together now and make the budget work and show we can handle our own economy. We then need Devo max with full powers devolved to Stormont along with the corporation tax in 2018.

  • Skibo

    Has that not been discussed with Westminster being prepared to hand back around £40m already held back or did I hear something else?

  • Kevin Breslin

    Disabled people will do better under the deal than they would the fast and furious implementation of PIP and English benefits rules with very little information on the change.

  • Kevin Breslin

    David are you saying that no additional money should be spent on welfare in Northern Ireland in comparison to England. As British as Finchley and Ignorance is Bliss and all that?

    We know the Irish government are far more generous when it comes to Welfare, yet its economy is growing. We have 11,000 British people in the 26 counties who choose it over claiming in the North. So please don’t give me the utter rubbish that welfare reform is the answer to all that ills Northern Ireland and suggest the Republic of Ireland is any better.

    Do we want a reasonable safety net to phase in reform, or do we want mass panic among the unemployed, the disabled and the working poor believing that the Invisible Hand which was so successful after the collapse of Ulster’s industrial age is coming to save us again.

  • Kevin Breslin

    And why not? Tougher problem, limited budget, Tougher solution.

  • Kevin Breslin

    We’re seeing £20 million in additional cuts over the next 4 years to mitigate welfare reform.

    Removing that £20 million over four years and doing nothing about tax credits would put working people on tax credits back on benefits, which although smaller reduces the overall net productivity of this place.

  • Skibo

    From what I can make out Westminster will legislate on Welfare in the short term only, with power returning at the end of 2016. For the next year our welfare system will probably look quite like Scotland’s other than we will have more money designated to mitigate the worst effects of the cuts.
    The grey area will be the tax credits.

  • Croiteir

    Just shows that Enoch Powell was correct – power devolved is power retained

  • barnshee

    Pay for the “invisible hand ” via tax raised in NI –stand on your own feet or perhaps those nice people in the 26 will fund it

  • barnshee

    Fall about laughing Refusing to make people pay for their actions is ” the point of a sword”

  • Yes. But all legislation Osborne wants will be done pre end 2016. That’s the big thing, to get the harsh decisions in first two years of this Parliament done and dusted. Stormont left to make the money go around, and around…

  • Kevin Breslin

    Yeah you must be worked off your socks to pay for the freeloaders you’ve time to waste on a political forum.

    Stand on Your Own Two Feet, is that what the libertarian said to the cripple?

  • Gaygael

    You could have used the £300million on corporation tax to mitigate?

  • whatif1984true

    If the Executive allocates “a total of £585 million from Executive funds over four years to ‘top-up’ the UK welfare arrangements in NI” and there is no extra money provided to cover this then there will be cuts of 585 million over four years in other NI Depts.

    Am I confused about this?

  • Reader

    Kevin Breslin: David are you saying that no additional money should be spent on welfare in Northern Ireland in comparison to England.
    This deal takes us past the concept of “should” and “shouldn’t”, and into the realm of “is” and “isn’t”. We get the block grant that “is” calculated for us, and the welfare reform that “is” imposed on us, and the freedom to shovel money from the departments to welfare. With that freedom, our politicians will opt to trash our infrastructure for the next decade, at least.

  • Skibo

    I know what you are saying but what is the better option? refuse to put welfare cuts in place and Westminster takes the powers back with no date when they are to be returned or be proactive and allow it to revert to Westminster for a set time with a confirmed date of return.
    The basic truth is we do not have enough money to make everything work. Best to get on and try and improve the economy and get people off welfare.
    I don’t agree with always holding out the begging bowl to Westminster. Time to stand on our own legs. The more we stand on our own the stronger we will get.

  • Kevin Breslin

    Our most important resource is our people, not our infrastructure, not our mental self-images.

    Slashing a welfare budget ad hoc manner isn’t welfare reform, it’s no great shakes against unemployment. The problem is welfare reform in England is populist, it’s populist abit here too, but it isn’t popular here.

    It’s letting the problem fester, cutting off the economy from those who need to be resourceful and ensuring that a narrower range of people with limited skills needs in the higher reaches of our economy focus on self-indulgent exportable trades like hedge fund management and the creative industries, over the hard-graft exportable trades like engineering and manufacturing.

    England is far ahead of Northern Ireland when it comes to skills investment, juxtaposing England’s situation onto Northern Ireland and expecting the same results is kind of giving everyone farm equipment and a bit of land and expecting them to be farmers.

    Pleasing people who are eager for welfare reform isn’t going to boost productivity, they’ll work as hard as they normally do, complain about the brain drain and skills shortages and wouldn’t think twice about tipping a student café worker.

    It’s completely populist, it gives middle class people moral vindication for doing nothing. We’ve high youth unemployment and we expect these young people to wipe our arses for us in our eighties and they need to make their own jobs now by limited resources to get the easier earned savings of a much older generation.

    The people complaining about handouts are getting the greatest handout there is, in an NHS that young people have to pay for.

  • Skibo

    And that is why devolution is so important, second only to reunification which is the final solution.

  • Reader

    Kevin Breslin: Slashing a welfare budget ad hoc manner isn’t welfare reform, it’s no great shakes against unemployment.
    Cutting departmental budgets to prop up welfare will definitely increase unemployment. Still – look on the bright side – if people lose their jobs then they won’t be needing to have Stormont prop up their Working Tax Credits either. So a saving on the departmental side leads to another saving on the welfare side.
    Are we having fun yet?

  • Reader

    Kevin, I thought I would post this part of my response separately. My other post assumes that you have accepted that there is less money and Stormont is just allocating the available money between Welfare and departmental spend.
    However, if you have not accepted what I perceive as reality, what are you asking for, and who are you asking to deliver it? Or are you just letting off steam?

  • barnshee

    “Stand on Your Own Two Feet, is that what the libertarian said to the cripple?”

    Stand on your own feet is applicable to all those in society with the ability ( and the feet) to do so. Where you have feet –stand on them– where you need to support ” the cripple” do so from your own resources- don`t ask “Mother England” to do so.

  • Catcher in the Rye

    SF finally wake up. The sword has been there for three years. You’ve been denying it that whole time.

  • Sprite

    I’m anxious Kevin because in Stormont House 1 there was £564m for welfare mitigations. Now we’ve got £585m split between welfare and child tax credits. £240m is going to mitigate child tax credits so there’s only £345m for everyone impacted by welfare reforms.

    I simply cannot see how disabled people will do better in this scenario

  • Robin Keogh

    I dont know what planet your on but i hope the weather stays fine for you

  • Kevin Breslin

    Well one thing, some disabled people do have children and need child tax credits others are children, secondly if we remove the safety net for the very young and poor parents we might not help anyone. Our young people are driven either into exile or into under ambition, fair enough you can’t simply sit on the dole turn noses to a job when it’s a job, but why give up on using skills elsewhere? Our disabled get nothing in many companies in terms of supported employment. We’ve so called skill shortages but we send our own skills base into low paid work as a permanent measure or into the exile of emigration, that’s not financially caused, that’s socially caused. If necessity is the mother of invention, invention is treated like a bastard because the mother is ignored.

    If you are disabled and skilled you are more of an economic burden than simply not filling the job. That needs to change too.

    We’re being forced into welfare reform to pay for an older generation who got their university fees paid and access to better and more abundant jobs, and reap most of the benefits from public spending. They don’t know what they are asking our young people, unemployed and disabled if they impose a total sink or swim. Our society will be forced to adapt to lower welfare but it can’t do so overnight. We need a reform and job creation parallel process or we simply encourage those on lower welfare to stay on it. We shouldn’t have a society that blames welfare claimants, young people, migrants and criminals for everything and abandons all responsibility in the here and now in order to make scapegoats.

    There are liars who say if we are tough on migrants and welfare claimants we’ll reduce consumption and protect our levels of production. As long as workers and service providers are mortal we cannot maintain productivity by selectively targeting a small minority of consumers.

    The economic planning is too present centric, young people with their energy, their skills and their wills are our best untapped resource. They are the people we expect to be careers either now or in the future for our disabled too.

  • Kevin Breslin

    Even though there is controls being handed back to Wesminster I still consider welfare to be a departmental spend, we literally have a department that could administer it, so I disagree that overall spending on departments is being split between it and some outside thing called welfare, when in reality it is all departmental spend.

    I am sorry if you don’t believe the rest of the world has sensory organs and you are the chosen few who has access to this thing you call reality even having a monopoly on it. Everyone is in reality, everyone living is real, do not give a few condescending opinions predetermining a future that hasn’t happened yet and ignoring the stakeholders who can change things in the here and now.

    I’ve studied physics there are elements of reality I know about that you can’t even imagine.

    Your reality has no bearing on what Sinn Féin and the DUP representing a plurality of our voters want to do and why they want to do it. It means very little to the people here for you to say they are living in a fantasy land when most of the taxpayers are either voting for them or voting for no one, which helps them.

  • Kevin Breslin

    You are the one letting off steam here, trying to impose your reality without evidence. Those on working tax credits are as far as I’m aware working almost entirely in the private sector and are not going to lose their jobs from OTHER departmental spending cuts. My points are that cutting welfare payments is not a job creating action, and that Social security protection is a department at Stormont that does provide the insurance to you and David should you lose your jobs, to detach it as something non-departmental is to deny it is covering you. It reflects Rand’s hypocrisy of bemoaning welfare up to and including the time she availed of it.

    Attack welfare claiming all you want but don’t be so myopic to ignore it is a department, which you, I, David or anyone else can avail of. Don’t be so myopic to believe cutting welfare is raising the supply of jobs. High demand in welfare is a problem, but cutting demand doesn’t increase supply in job availability elsewhere. If you’ve any evidence it does I’d be happy to change my mind.

    I’ll accept these OTHER departmental spending cuts will put people on unemployment, they would be public servants who’d face public private sector redistribution anyway. I’ve gone from public sector work to the private sector and I’ve taken tax credits. This private sector won’t be paying any additional tax for this and doesn’t have to lift a finger to help anyone.

    I claimed working tax credits before in my life, it was no skin off the noses of my employer, but I had to skin my own nose just to get them. It is simply a minor tax reduction and nothing else, at the same time I was paying the state to further educated myself and get a job where I would be able to pay them, my previous tuition loan and other benefits back. I didn’t get handouts or money in my hands.

    Cutting welfare is not job creating exercise. The dogma that it is passively creating jobs needs to be abandoned. It’s simply an ideological reassurance in the lie that “being harsh on welfare” is a form of enterprise or aids enterprise. As the son of an entrepreneur, I can assure you it isn’t what my mother did. Maybe trying having less on welfare would produce better savings than simply having the same number on lower welfare. To me the former is reform and the latter isn’t.

  • Kevin Breslin

    I will also note that unemployment has decreased despite a lack of welfare reform and the harm from treasury penalities to audit the finances used. So “Reality” as you put it Reader, that unemployment will rise without welfare reform, or because of welfare generocity (through people choosing to quit their crappy jobs to claim benefits) doesn’t seem to hold up to current empirical trends. This is classic Golden opinionism.

  • Reader

    Kevin Breslin: I still consider welfare to be a departmental spend, we literally have a department that could administer it, so I disagree that overall spending on departments is being split between it and some outside thing called welfare, when in reality it is all departmental spend.
    OK then, the argument is more long winded because you won’t accept shorthand. Street lights will go out, and won’t be fixed, roads will disintegrate, special needs teachers will lose their jobs, trains will break down and buses will stink, and crash. Loads of clerical contractors will lose their civil service placements. This is so that DLA can remain as a lifetime award, and so the current thresholds and rates for working tax credit can be preserved. In a couple of years new claims for child tax credits will be capped after 2 children. Is Stormont going to subsidise that too? And do you think the NHS can really be ring-fenced?
    Kevin Breslin: I’ve studied physics there are elements of reality I know about that you can’t even imagine.
    And now you have at last found a use for all that knowledge? I did 9 years of physics after leaving school before I left university to get a job that was fit for raising a family.

  • Reader

    Kevin Breslin: Attack welfare claiming all you want but don’t be so myopic to ignore it is a department, which you, I, David or anyone else can avail of.
    There is a limited amount of money. It has to be divided up carefully. Either Welfare is cut, or other spending is cut, or some combination of the two. None of the options is pleasant. If you think there is a fourth option, say so and I’ll stop wasting my time.
    By the way, some civil servants have already opted for voluntary departure on feather bedded terms. So the actual pain will be felt by contractors, and by the employees of the other companies that receive so much of what the departments spend every year. The hundreds of millions of pounds saved will be mostly at their expense. There will be no feather bedding for them. It’s just JSA.

  • Kevin Breslin

    Okay, you accept I won’t accept shorthand. It’s a deceitful shorthand loaded with right wing spin rather than honesty.

    But accept that I have been honest about job cuts and public services cuts. I disagree that DLA is a lifetime reward, because DLA won’t exist, PIPS will be introduced with the same safeguards as England and top ups for those losing out. If people are making fraudulent claims as you are profiling them they will face sanctions. That’s not a financial matter, that’s a law enforcement matter. People defraud the tax system too but that’s never used as an arguement for lowering taxes.

    Cutting DLA indiscriminately is punishing the legitimately disabled claimant on the same level as those claiming benefits fraudulently. It will also have negative strain on public services as mental and physically ill people could live in mental hospitals or conventional hospitals for the rest of their lives rather than the community. We have a limited budget, exactly how are we going to afford that luxury? Do you really think you fix or treat a disability or a mental illness by not spending money on it? What does PIPS stand for!

    I would say we couldn’t ringfence the NHS without a PIPS/DLA system rather than needing to get rid of it. Even the Tories agree with me, or indeed vice versa on that principle.

    On occasion people on lifetime DLA are saving the NHS money, they’re not taking up beds, they are not contributing to waiting lists, they are not adding to their doctor’s workload because they can get some level of independence as an outpatient. That’s why DLA exists, and there are abusers, but abusers can find other schemes as long as profiling is used as a substitution for enforcement.

    My main arguement is there is a clear difference between welfare reform and welfare cuts, my next arguement is that welfare payments are an exaggerated part of our total expenditure, that unless welfare goes we won’t have anything but skeleton health, law enforcement and education and nothing for anything else. This is ridiculous, this would make welfare far and away our largest source of expenditure, it’d make claimants richer than the taxpayers funding them.

    The real figures don’t match the Daily Mail hysteria, which pretty much seem to be happy if taxpayers made a fatwah against anyone going into a Jobcentre. They back a Taxpayers alliance run by a tax exile, would that not reflect someone who wants to take more than they put in?

    If our region is so unproductive it needs to completely audit the welfare system and leave jobseekers and disabled people abandoned in order to run basic healthcare and infrastructure then welfare is nowhere near our biggest problem.

    Even with mitigation this is a net cut in welfare, but welfare cuts as I keep saying is not welfare reform.

  • Catcher in the Rye

    avoiding the point as usual.

  • Robin Keogh

    Impossible to avoid something that doesnt exist

  • whatif1984true

    The dec welfare agreement had a clause that
    claimants who falsify claims are NOT to be prosecuted is that now no longer a clause?

  • Kevin Breslin

    We’re not. If the UK government wants to simply give us what we earn or even less taking our earnings for national stuff it can do so. Without a welfare system this place would completely fall apart. Everyone knows it.