Official Report: Monday 16 February 2015
The Assembly met at 12:00 pm (Mr Speaker in the Chair).
Members observed two minutes' silence.
Mr Hussey: On a point of order, Mr Speaker. I apologise unreservedly for not being in my place when called at Question Time. I apologise to you and your staff for any inconvenience that that may have caused.
Mr Speaker: Thank you very much for making that apology to the Chamber. It will be noted.
Mr Speaker: Mr Máirtín Ó Muilleoir has sought leave to present a public petition in accordance with Standing Order 22. The Member will have up to three minutes to speak.
Mr Ó Muilleoir: Go raibh maith agat, a Cheann Comhairle. Tráthnóna maith. Ba mhaith liom misneach mhic léinn Choláiste Naomh Muire a mholadh agus mé ag cur achainí os do chomhair. I present to you, Mr Speaker, a petition from the students and community of west Belfast on, as it was at the time, the planned closure of St Mary's University College. The students asked a representative from South Belfast to present the petition to show solidarity and to send their best wishes to Stranmillis University College. Of course, as we know, both university colleges were threatened with closure at that time.
I am happy to present the petition, and I want to say some words of praise for the students. In this day and age, we often hear people say that our young people are not engaged enough in civic or political life, and, with their leadership of this campaign, I think that they showed exactly the opposite. They rose to the challenge, and we owe them a debt of gratitude.
I am aware that circumstances have changed since the petition was first circulated and won the support of people well beyond the confines of St Mary's University College. I will only say that, as we look to the future, I think that you will find in these students who led the campaign great allies as we start to discuss and continue discussing a shared and pluralist approach to further and higher education. Ba mhaith liom sin a bheith ráite, agus go ndéanaimid uilig comhghairdeas leis na mic léinn.
To finish, I know that the Minister met the students, and I think that he will find that they are progressive and ambitious and have high aspirations for themselves, their community and this society. I believe that, in the time ahead, they will continue to engage with him in this debate about saving the university colleges and ensuring that they prosper. My only word of advice for the Minister is to bring a bouquet to that discussion, rather than a metaphorical blunderbuss.
Mr Ó Muilleoir moved forward and laid the petition on the Table.
Mr Speaker: I will forward the petition to the Minister for Employment and Learning and send a copy to the Committee.
That Standing Orders 10(2) to 10(4) be suspended for 16 February 2015.
Mr Speaker: Before we proceed to the Question, I remind Members that the motion requires cross-community support.
Question put and agreed to.
Resolved (with cross-community support):
That Standing Orders 10(2) to 10(4) be suspended for 16 February 2015.
That the Jobseeker's Allowance (Maternity Allowance) (Amendment) Regulations (Northern Ireland) 2014 be approved.
The amendments to the Jobseeker’s Allowance Regulations (Northern Ireland) 1996 ensure that the existing provisions relating to a maternity allowance payable to a woman who regularly participates in her spouse's or civil partner’s self-employed business are treated in the same way as a maternity allowance that is paid to a woman who is employed or self-employed in her own right, for the purposes of identifying and determining entitlement to jobseeker’s allowance (JSA).
The regulations are technical in nature and are a consequence of the recent introduction of a maternity allowance for a new group of women who habitually participate in their self-employed spouse’s or civil partner’s business but who are neither employed nor self-employed. The regulations ensure equality of treatment by treating this new group of women in the same way as women who are employed or self-employed when determining entitlement to jobseeker’s allowance.
Mr Maskey (The Chairperson of the Committee for Social Development): Go raibh maith agat, a Cheann Comhairle. The Committee for Social Development considered the SL1 pertaining to this legislation at its meeting on 11 September 2014 and subsequently officially recorded its support for the regulations at its meeting of 25 September 2014. As the Minister indicated, the rule came into operation on 16 September 2014, and the Assembly is being asked to confirm it. Following consideration and the report by the Examiner of Statutory Rules, the Committee recommends that the rule be confirmed by the Assembly.
As the Minister outlined, the rule made consequential amendments to the jobseeker's allowance regulations following the introduction of a 14-week maternity allowance for pregnant women who participate in their self-employed spouse’s or civil partner’s business but receive no income from doing so. The Committee acknowledged that the amendments benefit women and, therefore, welcomed the rule. On behalf of the Committee for Social Development, I ask that the Assembly confirms the regulations.
Mr Storey: I thank the Chair of the Committee for the comments he has made in relation to the issue. I am pleased that there has been consensus across the Assembly in relation to the regulations. As I said, the regulations are technical in nature and simply ensure the equality of treatment in determining entitlement to jobseeker's allowance.
By amending the JSA regulations, we will merely be ensuring that the existing provisions of a maternity allowance payable to a woman who regularly participates in her spouse's or civil partner's self-employed business are treated the same way as a maternity allowance that is paid to a woman who is employed or self-employed in her own right, for the purposes of identifying and determining entitlement to jobseeker's allowance. I would, therefore, like to thank the House for the endorsement of the regulations in the Chamber today.
Question put and agreed to.
That the Jobseeker's Allowance (Maternity Allowance) (Amendment) Regulations (Northern Ireland) 2014 be approved.
That the Second Stage of the Budget Bill [NIA Bill 45/11-16] be agreed.
Accelerated passage of the Bill through the Assembly is needed in order to ensure Royal Assent as early as possible in March. This is necessary to obtain legal authority for Departments and the other public bodies to spend the cash and use the resources in the Bill in 2014-15 and to ensure a smooth continuation of public services into 2015-16.
Preparation of the detailed Estimates and the related Budget Bill that is under consideration today was a challenging undertaking given the timetable involved. The Bill and Estimates must reflect the latest financial position, which was announced to the Assembly only on 19 January, yet the Bill requires Royal Assent prior to the end of this financial year.
I am therefore grateful that the Committee for Finance and Personnel has confirmed, in line with Standing Order 42, that it is satisfied that there has been appropriate consultation with it on the public expenditure proposals in the Bill and is content that it may proceed by accelerated passage. I again welcome and appreciate the assistance of the Committee in this matter.
I shall now briefly outline the purpose of the legislation that is before us today and draw attention to the main provisions of the Bill. The debate follows the Bill's First Stage last week, which, in turn, followed the debate and approval of the three Supply resolutions that were introduced in this Chamber on 9 February. The purpose of the Bill is to give legislative effect to the 2014-15 spring Supplementary Estimates, the 2015-16 Vote on Account and the 2015-16 Main Estimate for the new judiciary pensions scheme. Copies of the Budget Bill and the explanatory and financial memorandum have been made available to Members today.
I do not intend to repeat the detail that was provided to Members during last week's very lengthy debate. In fact, Standing Order 32 stipulates that the debate should concern itself with the narrow content of the Bill; a point which I hope Members will remember during today's proceedings.
For the benefit of Members and in accordance with Standing Order 32, I wish to summarise briefly the main features of the Bill. The purpose of the Bill is to authorise the issue of £15,646,075,000 from the Northern Ireland Consolidated Fund in 2014-15. This is nearly £172 million more than the amount that was authorised in the June Main Estimate. This cash is drawn down on a daily basis as needed from the Northern Ireland Consolidated Fund, which is managed by my Department on behalf of the Executive.
The Bill also authorises the use of resources totalling £17,051,879,000 by Departments and certain other public bodies. This is some £337·5 million more than was authorised in the June Main Estimate. These amounts are detailed by Department in part 2 of each spring Supplementary Estimate for 2014-15.
In addition, the Bill revises for 2014-15 the limit on the amount of accruing resources that may be directed by my Department to be used for the purposes in column 1 of schedule 2. This limit includes both operating and non-operating accruing resources — in other words, current and capital receipts — and amounts to £2,386,731,000. Under section 8 of the Government Resources and Accounts Act (Northern Ireland) 2001, a direction on the actual use of the accruing resources will be provided by way of a DFP minute, which will be laid before this Assembly in March following Royal Assent of the Bill.
Therefore, not only does the Bill authorise the use of resources but it also authorises accruing resources, bringing the total resources for use by Departments and other public bodies to more than £19 billion.
The sums to be issued from the Consolidated Fund are to be appropriated by each Department or public body for services, as listed in column 1 of schedule 1 to the Bill, while the resources, including the accruing resources, are to be used for the purposes that are specified in column 1 of schedule 2 to the Bill.
The amounts now requested for 2014-15 supersede the Vote on Account in the Budget Act (Northern Ireland) 2014, which was passed this time last year, and the Main Estimate provision in the Budget (No. 2) Act (Northern Ireland) 2014 that was passed by this Assembly in June 2014.
The Bill also authorises a Vote on Account for 2015-16 of cash of £7,075,640,000 and resources of £7,742,283,000 to allow the flow of cash and resources to continue to public services in the early months of 2015-16 until the Main Estimates and the related Budget Bill are approved in June later this year. Again, the cash and resources are to be appropriated and used for the services and purposes that are set out in column 1 of schedules 3 and 4 respectively.
Clause 5 of the Bill authorises the temporary borrowing by the Department of Finance and Personnel at a ceiling of £3,537,820,000 for 2015-16. This is a normal safeguard for any temporary deficiency arising in the fund. I must stress to the House that clause 5 does not provide for any additional cash out of the Consolidated Fund or convey any additional spending power, but it enables my Department to run a very efficient cash management regime.
Finally, the Bill authorises the Department of Justice to use resources of up to £50,000 in 2015-16 for the new judicial pension scheme.
At this stage, there is little more that I can usefully add on the Budget Bill. I look forward to continuing the debate today and will respond to as many points of principle or detail as Members wish to raise.
Mr McKay (The Chairperson of the Committee for Finance and Personnel): Go raibh maith agat, a Cheann Comhairle. I apologise for missing the start of the Minister's contribution. Things are running quite swiftly this afternoon.
As we heard, the Budget Bill provides statutory authority for expenditure as set out in the spring Supplementary Estimates 2014-15. The Bill also includes the Vote on Account, which allows Departments to incur expenditure and use resources in the early part of 2015-16 until the Main Estimates are voted on by the Assembly in June.
Standing Order 42(2) states that accelerated passage may be granted for a Budget Bill provided the Committee for Finance and Personnel is satisfied that it has been appropriately consulted on the public expenditure proposals in the Bill. At its meeting on 4 February, departmental officials briefed the Committee and answered questions on the Bill, including on issues relating to a range of Departments. In addition to that evidence, the Committee has scrutinised each of the monitoring rounds during the current financial year, both for overall outcome across Departments and for the position for the Department of Finance and Personnel. In view of that evidence-gathering exercise throughout the year, the Committee was content to grant accelerated passage to the Bill. I therefore wrote to you, Mr Speaker, to inform you of the Committee's decision.
As I pointed out during last week's Supply resolution debate, the scale of the cumulative changes resulting from the normal reallocations through the monitoring rounds, combined with the in-year technical changes, will, in some cases, have resulted in significant differences between the opening and closing resource and capital allocations of Departments. The Committee welcomes the engagement with the Department on those issues during the quarterly monitoring rounds, and members will continue to prioritise that aspect of their work. In that regard, I encourage the other Statutory Committees to continue to monitor closely the financial forecasting and expenditure of their respective Departments for the remainder of this year and during the next financial year to ensure that underspend is minimised and that Departments maximise the impact from available resources.
I shall not rehearse or rehash the issues that were covered in the recent plenary debates on budgetary matters, including the provisions of the Bill. Instead, I wish to highlight a fundamental weakness in our financial and budgetary process that has become even more apparent in recent weeks and is relevant for the process for this and future Budget Bills. Within the last five weeks, since the Committee's take-note debate on 12 January, we have had no fewer than four plenary debates on budgetary matters, each of which has some relationship to the 2015-16 Budget. Moreover, in the case of each of those debates, given the late stage of the process, statutory limitations and other factors, there is little scope for the Assembly to influence changes.
I believe that that raises a serious question as to whether the current process makes for effective and efficient use of our time in the Chamber. Is it a cost-effective approach to achieving input from the democratically elected institution? Surely there would be more potential for added value from the Assembly and for Members and Committees to inform Ministers and exercise influence if the opportunity for scrutiny and debate was front-ended at a point in the budgetary process when Executive decisions have not yet been taken. We are all acutely aware of the changes proposed to the public sector, so surely the Assembly and the Executive should also be prepared to reform and improve their processes.
As the Finance and Personnel Committee has pointed out, a solution to many of the difficulties and flaws in the budgetary process can be found by the Assembly and the Executive agreeing a memorandum of understanding (MOU) on the Budget process. That would establish a framework for improved cooperation between the Executive and the Assembly for budgetary matters and would facilitate Members and Committees in fulfilling their scrutiny and advice functions, which in turn will assist in overseeing the effective and efficient delivery of the Executive's strategic priorities.
In addition, the MOU will support the Executive in their role of managing public expenditure and help to maintain good working relationships between Departments and their Committees, as well as between Departments and Members. Indeed, a draft MOU prepared jointly by Committee staff and DFP officials was agreed by the Committee earlier this year and is still under consideration by the Minister before being brought to the Executive for approval.
If implemented, this MOU would help to address the fundamental weakness in our financial and budgetary process that I mentioned. In particular, it would help to front-end the Assembly's input to draft Budgets and afford scope to influence key issues in advance of future Budgets being agreed by the Executive. As the Finance and Personnel Committee stated, if genuine commitment is demonstrated and the MOU is operating effectively, there will be scope for further streamlining the end stages of the Budget process. The Minister, while confirming his support for the principles in the draft memorandum of understanding, considered that it would be appropriate to await the outcome of the 2015-16 Budget process to ensure that any lessons learned can also be reflected in the document.
Given the need for greater oversight and closer scrutiny of public expenditure, coupled with the recurrence of difficulties experienced by Committees — insufficient time and a lack of information prevent meaningful scrutiny — the Committee recommends that the proposed MOU on the Budget process be agreed between the Assembly and the Executive as a matter of urgency. In so doing, the Committee concurs with the Finance Minister that the draft MOU needs to reflect the lessons learned from the 2015-16 process. It would be helpful if the Minister could in his winding-up speech give an undertaking to the House that work will resume to finalise the MOU, thereby enabling us to reform the budgetary process with a view to maximising the value of our time spent in the Chamber and in Committees. On behalf of the Committee, I support the motion.
I will just add a few comments from a party perspective. It is clearly the case that devolution is evolving elsewhere. We look at the Smith commission and how different revenue streams will be added to the Scottish Budget. In Scotland, there is a proposal for more power over income tax and bands, air passenger duty (APD) and the Crown Estate. As the First Minister in Scotland said, they are going in the direction of Scottish home rule. There is a risk of this institution being left behind. Edinburgh and Cardiff are ambitious: they want to move forward; they want more powers; they want to demonstrate that they can do their job, deliver on economic well-being and job creation and better the lives of those they represent. There is a danger that this institution will be left standing still.
I was looking at last June's debate about APD and the air connectivity report that we were waiting for at the time from the Finance and Enterprise Ministers. I do not think that we have moved any further on APD, which remains, for me, a no-brainer. The current APD is damaging to tourism. If we maintain the position of waiting until Westminster addresses it, we could be waiting five or 10 years and missing out on economic opportunities, guaranteeing only that more tourists arrive in Dublin and fewer in Belfast and Derry. We want a level playing field across the island. We want more opportunities for our tourism sector, including bed and breakfasts, and for developing hotels in urban and rural parts of the North. Of course, Scotland is now to get APD. I argue that this institution needs it more, because we are on an island, and the South has now abolished any tax associated with people coming to the island. We need, therefore, to address that disadvantage, and it is a matter of concern that the Executive do not yet have a collective approach.
We in Sinn Féin want to see air passenger duty devolved, and we want to see it abolished. Obviously, we do not want to pay for the cost, but we need to have that option. At the end of the day, if Westminster were to abolish APD tomorrow, that would be happy days, but the fact is that there is no indication that it will be abolished. In the meantime, if we are serious about our tourist industry and economic growth in that sector, we need to push for the transfer of the power in the shorter term.
The Crown Estate portfolio in Scotland will now go to Edinburgh. That is something that my party colleague Oliver McMullan has raised before, and he is bringing the matter to the House again. The Crown Estate here needs to be brought under the control of the Executive. The options are whether the Executive have a direct say over the revenues raised or whether those go to local councils. If it is a no-brainer in Edinburgh, I fail to see why we should not have control over the issue here, particularly for areas such as the glens. Those who live in coastal areas need to see a greater advantage coming from the Crown Estate. The best way in which to ensure that its value is put back into communities is to ensure that local representatives make the decisions about it.
A rates revaluation process was undertaken, which the Committee looked at and scrutinised. The revaluation is in the process of being rolled out. There is a lot of concern amongst different businesses about major adverse impacts in certain areas. My party colleague Phil Flanagan held a meeting on that in Enniskillen recently. He flagged up the example of some petrol station forecourts having seen a 70% increase in their rates overnight. Of course, in an ideal world, you would have revaluations all the time. That is not the case at the moment; the last revaluation was done over 10 years ago. That is why there are now radical differences in the valuations attached to non-domestic properties. Will the Minister, in his winding-up speech, bring us up to speed with the economic impact of the revaluation. What are his thoughts on how we address it?
The system is not perfect by any means. The Committee discussed how we might review non-domestic rates and the rates system to prevent anomalies being introduced, such as where businesses with small profit margins are seeing huge rates hikes that are putting their lights out. We need to do our best to ensure that that does not happen. More could be done to explore a more equitable way forward. If businesses are not viable, they are not viable, but there is a sense from the grass roots, from towns and from parts of our cities that there is an unfairness involved. Some examples, such as that of the petrol station forecourts, have been flagged up. There is also an issue with indoor go-karting facilities, which we raised a few months ago. There, the profit margin is low, yet the rates valuation does not match that profit margin. The Department needs to find creative solutions to such anomalies. It is not an easy job by any means, but, in the time ahead, the Minister should outline how, particularly for small businesses, medium-sized businesses and those that have small profit margins, we can find a more equitable way forward to protect businesses and jobs.
The Department of Health has received a £200 million uplift as a result of the budgetary discussions. That money needs to go to the front line. The big challenge for the Health Minister is to ensure that he gets to grips with the waste in his Department and puts more money into front-line services. Locally, we have been through the experience of the Save the Dal campaign against the proposed closure of Dalriada Hospital. That is what it was; it was certainly not a temporary closure by any means.
(Mr Principal Deputy Speaker [Mr Newton] in the Chair)
The Dalriada Hospital is a perfect example of what Transforming Your Care is all about. It is about care in the community and keeping patients and their families out of acute services. The Causeway Hospital is not without its problems either, given the number of serious adverse incidents (SAIs) that I have dealt with in recent times, but it is working well and its services are needed in that area. The Health Minister needs to give assurances, now that he has received such a significant uplift from the Executive, that those services along the north coast will be protected. He needs to ensure that any decisions coming from the Health Department are rural proofed.
I look forward to the Minister of Agriculture and Rural Development bringing forward her proposals for rural proofing. It has too often been that case that, when Departments face pressures, it is rural services that are looked at first. Rural communities are seen as a soft touch and an easy place to make cuts. What happened in Ballycastle will ensure that the Health Minister will think twice before looking there again, but he has not given an assurance that the Dalriada Hospital is not still in the cross hairs of the Northern Trust or the Department for the 2015-16 financial year. He needs to give that assurance to the community in Ballycastle and on the north coast, and the same applies for the Causeway Hospital.
The Budget is the result of Westminster decisions and Tory policies that have been in place for a number of years now. The politics of austerity has not worked here, across the water or across most of Europe. We need to see a change and, if it is continually going to be the case that we will have austerity thrust upon us by the Tories at Westminster, we need to take those powers and controls for ourselves. We need to be ambitious about adding to our own fiscal toolkit.
None of us want to be spongers here. A lot of MLAs like to celebrate being political spongers and the value of the Union and so forth, and then they complain when the Westminster Government make decisions against them that negatively impact on their constituents. We are the best people to represent the people in North Antrim, Fermanagh and South Tyrone, East Derry and North Belfast. We need to be more ambitious about having control over our Budget and having the information about where our taxes go to and come from. The discussions and debates that we have had in the Finance and Personnel Committee have revealed that a lot of the information is not transparent. The reason for that is that the Treasury wants to have control. It will have control in any future negotiations about budgetary matters and it will always have the upper hand and advantage unless we call for further transparency in these matters.
In other countries across Europe, where there is a more federal set-up, all the information is transparent and everything is accountable. There is absolutely no reason why the people we represent should not be entitled to full fiscal information about where corporation tax receipts go and where income taxes go. That information needs to be more transparent, the systems need to change and, until we do that and form a collective political front to call for that information to be made transparent, the Treasury will continually try to wipe our eye. That is not going to operate to our advantage and it is certainly not going to operate to the advantage of the people we represent.
We need to have a mature political conversation about that, because if we are going to represent the people who elected us, we need to have the information relating to their taxes and their fiscal and economic well-being.
We need to be able to challenge the Treasury better because the experience of recent negotiations, whether on corporation tax or what not, shows that the Treasury is just throwing figures at us to scare us. Until we have full transparency over that information, the Treasury will continually try to wipe our eye, so there is a challenge for the Assembly and Executive to be ambitious on economic powers and fiscal tools and to be more challenging in dealing with the Westminster Government and taking on the Treasury.
Mr Girvan: The Committee had a good opportunity to go through the budgets as presented. In doing so, there are areas I have concerns about. We heard about transparency. There is a lack of transparency in how the figures from Departments are presented in the Budget statement. Block headings seem to hide quite a large spend. Certain Departments seem to be worse at that than others. I do not know whether that is officials or direction from ministerial level but large budget headings seem to hide large amounts of money. Quite a bit is not as transparent as it should or could be.
We are maybe in a better position than a few months ago in that we had all sorts of doomsday scenarios if we could not achieve a Budget. It looked as if the draft Budget was going to give serious problems. A good of amount of work has gone on. There have been costs: we have wasted money in delaying the implementation of welfare reform. Some believe that accommodations were made in that process. There is not a big lot of difference from what was agreed 18 months ago between the Department and the Treasury. We got it over the line through the Stormont House talks and that was something.
The rates re-evaluation process has attempted to address what was some imbalance in town centres. Sometimes, town centres pay the lion's share of the rates. As a consequence, they were not necessarily having the footfall to facilitate that. To help to regenerate some of the worst-hit towns, some movement has been made. There are winners and losers in every process but the revenue raised through the rates will not necessarily increase dramatically.
That means we have to make sure we are collecting the maximum amount of rates, which are the main taxation opportunity for this House. As a consequence, we need to make sure that we get in the lion's share of those moneys and ensure that it is properly spent and distributed to Departments.
We have attempted to address that through the revaluation of non-domestic premises, which has worked in town centres. There are those who may complain because they seem to be getting a fairly stringent hit but we raise in the region of £1·1 billion per year through rates. As a consequence of the Budget Bill, we are dealing with about £15·6 billion. A fairly large percentage of that is the block grant from Westminster.
The Barnett formula appears still to be the best option in town. Unfortunately, some people say that we could do different things. Genuinely, I believe that we are better off with the formula that is being used. As a consequence, we have more money to spend than we generate in taxation in Northern Ireland.
I will move on to deal with Departments. Some have delivered projects in the past four years as a result of monitoring round programmes. We have a number of monitoring rounds in the year, taking place in June, October and January. As a result of picking out particular things and not receiving moneys from those monitoring rounds, certain functions, which would be deemed to be key, have been put on hold. I think that it is now vital that key functions are included as part of the bid process, as opposed to expecting the monitoring rounds to deal with them. I see monitoring as rounds delivering the icing on the cake. You can still have the cake, but if you want to put additional icing on it, you have to use the monitoring round process to do that.
We have to see that less money came through in the last two major monitoring rounds than had been initially anticipated. That was a consequence of having £4 billion wiped from our Budget over the four years from 2011 to 2015, which is a result of the Conservative Government's approach to Northern Ireland. I appreciate that that hit was quite extensive, but it was managed. Whether people believe it or not, I think that it has been managed to a large degree. We ran into some difficulties towards the end, but that was a consequence of some past expenditure.
The Department of Health, Social Services and Public Safety deals with around £4·7 billion in the year, which makes up a very large percentage of our spend. The Department of Health and the Department of Education spend the lion's share of our block grant. There is some indication that £200 million has gone to Health, but of a £4·7 billion budget, that is a very small percentage, and I see some difficulties.
I have some concerns about continuing to throw money at Departments that do not necessarily make the best or most effective use of it. There have been some instances in which we have applied additional moneys to Departments, and when you come back and look at them a year later, you see that what was additional last year has become part of their bid for normal functions. I think that there needs to be a realisation that we do not have a bottomless pit. We need to make effective use of the money that we have. I do not necessarily believe that we are getting the efficiencies that can and should be delivered from two of the Departments that are making very large spends.
On the back of what has been said, from a Committee point of view, the review of the financial process and the budgeting process has caused concern. Some people believe there is a necessity to change that process so that there is a more streamlined, open and transparent way forward. That has to be dealt with.
I think that there are Ministers who attempt to go on solo runs and have their own vanity projects, wish lists and personal agendas. As a consequence of those personal agendas, sometimes they attribute a large commitment of public funds to deliver something that is deemed to be of interest to only a very small minority of people and that, at the end of the day, probably does not deliver anything other than a political or personal agenda. On the back of that, I think that it is vital that there is a realisation that we do not have a bottomless pit of money. If we did, you could go down the route of dealing with everyone's personal agendas. However, we do not have that, and we have to deal with that in the round.
I support the Bill as presented. I welcome the work undertaken by the Finance Minister, his predecessor and the Executive in bringing forward a Budget to the Assembly, which goes a large way to dealing with it. We have the opportunity to borrow money within the next year. Some people have asked, "Why would you borrow?" We will borrow to pay for the exit programme for the public sector and will have an opportunity to reinvest that money in the years to come as we will not make that spend.
We have to grow our private sector. There has to be less reliance on the public sector; and, as an economy, we can only go forward once we have a private sector in place that is capable of delivering for Northern Ireland and creating the wealth to keep our economy going. We have invested moneys in the likes of Invest NI, which has gone out and probably outperformed on all its expectations on inward investment and bringing jobs into Northern Ireland. It is our place to ensure that the jobs that are here are supported and that we encourage employers to invest and keep up the employment within Northern Ireland.
I look at it very much as someone who was involved in the private sector, and it is vital that the private sector avails itself of the opportunities when we have the powers to deal with corporation tax. That will help others. Some people say that a lower rate of corporation tax will mean more going into the back pockets of those who are the owners of large businesses. To a large extent, businesses have to invest to go forward, so they will use that money to invest, whether it is in jobs or new technologies within their businesses. That will be for them to decide, but that opportunity will be there. A lower rate of corporation tax is one of the tools in the box. It might not necessarily be the silver bullet, but it can and should be used. I support the Budget Bill as presented.
Mr D Bradley: Go raibh míle maith agat, a Phríomh-LeasCheann Comhairle. Tá mé buíoch díot as an deis cainte sa dara céim de Bhille an Bhuiséid 2015-16. Mar is eol dúinn, baineann an dara céim de Bhille ar bith leis na bunphrionsabail atá taobh thiar de Bhille. Thank you very much, Mr Principal Deputy Speaker, for the opportunity to speak on the Second Stage of the Budget Bill, which will deal with the year 2015-16.
As we know, the Second Stage of any Bill affords Members the opportunity to examine the underlying principles of the Bill in question. I suppose that, usually, the underlying principles of a Budget Bill would be the agreed Programme for Government, but that is not the case with this Bill as no agreed Programme for Government underpins it, and, therefore, we have to search for the underlying principles.
We have heard calls for improvements to be made to Budget information. That includes the rationale behind decisions to make, or not make, allocations to particular services or departmental functions and the impact that such decisions will have, including what specific safeguards will be put in place to prevent priority front-line services being affected. Without those underling principles, the rationale for those decisions is difficult to conclude.
Last week, I spoke about the situation that the Department of the Environment faces. In particular, I spoke of my concern about the implications of the final Budget for the rates support grant. As I said then:
"Reductions to that grant will impact directly on those less well-off councils that have access to those grant payments to help make good the difference between their rates income and the money that they need to maintain parity of service provision with more wealthy councils." — [Official Report, Vol 101, No 7, p10, col 2].
At that time, I said that that would be particularly unfair and unwelcome at a time when councils are seeking to make the major organisational changes associated with local government reform and reorganisation. Councils cannot meet the expected pressure on their budgets that, even with additional allocation, is anticipated to be in the region of £3 million. One has to ask: where is the rationale for such an outcome and what underlying principle supports this?
Mr Attwood, when he spoke last week, mentioned the potential for heritage-led development here, for creating the many thousands of jobs that it has done in Dublin or Scotland. He said that the consequences of the Budget Bill would be to undermine heritage-led development and stifle the potential to create those jobs. So, once again, how can a Budget which stifles the potential to create jobs be said to be based on underlying principles?
The shortcomings of the Budget process are clear for all to see. The Assembly Committees experience difficulties with both the time available and the lack of information coming from Departments, so the current process has fallen far short of international good practice, and it highlights, once again, the need to put in place the memorandum of understanding between the Assembly and the Executive to ensure that the shortcomings are addressed and that future Budget processes meet the needs of both the legislature and the Government.
This Budget is more akin to the equivalent of a financial shotgun wedding than an agreed Budget. A report published by the Association of Chartered Certified Accountants entitled 'Parliamentary financial scrutiny in hard times' compared the level and quality of financial scrutiny across countries and jurisdictions. It noted that:
"The outdated ‘estimates supply votes’ process that exists in Westminster-style systems is a key barrier to effective parliamentary scrutiny of the budget and financial reports."
The Budget before us and the process that led up to it is one of the worst examples of that.
"In countries using the Westminster model of government, parliaments cannot realistically amend spending proposals, and many are barred from substituting a budget of their own. Instead, they are confined to assenting to spending proposals that are put to them ... The focus of financial scrutiny needs to be re-aligned with the budget, spending plans and resource accounts, but this will require significant structural and cultural reform."
Unfortunately, that is true of our Estimates and Supply votes-style system, despite the in-year monitoring process. As far back as 2008, the Finance Committee conducted an inquiry into the ability of the Assembly to effectively scrutinise the Budget. The Committee recommended then a number of measures that should be considered to make this process more accessible and provide opportunities and sufficient time for Members to contribute to and scrutinise the Budget and the in-year processes. Those measures included the memorandum of understanding, which has been mentioned by several Members, between the Assembly and the Executive in relation, in particular, to timely and adequate provision of information to Committees. That certainly was not the case this year.
One of the other points that the report highlighted was the need to establish:
"a regularised budget process, which includes clearly defined pre-draft Budget stages that provide for early Assembly input, irrespective of whether an annual or multi-year budget cycle is followed."
The third recommendation is that Statutory Committees should be more assertive in their statutory powers to call for persons and papers when such powers may be necessary. This year, Committees did not have much opportunity to do that.
You will remember that, in 2011, the Executive launched their own review of the financial process. The response to the review document highlighted many of the same recommendations raised in the Committee's earlier inquiry. It was stressed that an early strategic Budget phase is one of the most influential stages of the Budget process and, as such, is an essential requirement rather than an aspiration. This year, the budgetary process was further than ever from that .
Year after year, Members underline the need for reform of the budgetary process. It is my hope today that I will not have to come back to the House next year and mention the same need for reform. I acknowledge that the Minister is open to reform, but there is a need for much more urgency and energy in the process to ensure that we have a budgetary system that affords Statutory Committees and the Assembly the opportunity to scrutinise budgetary information fully and to make changes that they feel are necessary.
Mar sin de, a Leas-Cheann Comhairle, don bhabhta seo fágfaidh mé mar sin é. Thank you very much, Mr Deputy Speaker.
Mr Cree: It is a pleasure to speak on the Second Stage of the Budget Bill. This is always an interesting subject. There are discussions on a wide range of areas, and we have already had examples of that this afternoon. The only thing that I have not yet heard is the weather forecast, but maybe that will come up a little later.
It was encouraging to hear our Chairman talk about the memorandum of understanding. Other Members also touched on the review of the financial process, which we have been preaching here for years. The Minister will be pleased to know that, having heard that that be well covered by other Members, I will just leave it on the record as this: let us have it for next year — end of story. It is ridiculous. It is a pity that the Chairman of the Committee has just gone. The only thing that he does not seem to have learned is the Minister's lecture on economic theory. That seems to have gone over his head, I am afraid. However, I will turn to the task in hand.
The Bill covers the 2014-15 financial year and provides legal authority to spend for the early part of 2015-16. In June, we will consider the Main Estimates for 2015-16. Despite the fact that we are approaching the year end, it remains crucial that Committees continue to monitor the spending of their respective Departments so that underspends are minimised, and the risk of having to return funding to the Treasury will be avoided. There is little time left — about six weeks — in this final year of the four-year Budget. The year marked a turning point, and we face a tighter financial future. As Mr Bradley just said, 2015-16 is not geared to the Programme for Government, and we expect to have a new comprehensive spending round, which will shape the immediate future.
The Stormont House Agreement provided for a package to help the Executive to achieve their priorities. Up to £50 million additional capital DEL will be available for new shared and integrated education projects. The Budget 2015-16 is, at this stage, simply a block of figures — some 45% of last year's Budget — and does not have any detail. However, as we all know, the year starts on 1 April, and plans will have to be in place before then. So, how will this £50 million be spent and where will the benefits be felt?
The £30 million of resource DEL has been provided for the funding of bodies to deal with the past. What are the plans?
Arguably, one of the greatest challenges facing the Assembly is the voluntary exit scheme. Up to £200 million of reinvestment and reform initiative (RRI) borrowing will be used. What plans have been put in place to deal with the issue? What action will be taken if there are too few volunteers? I ask the Minister to advise on the costs arising from any delay in that scheme, as it appears, in my opinion, to have the potential to fail.
At the recent Budget debate, the Minister referred to the £13 million in the Department for Regional Development's budget that was anticipated to come from the reserves of the harbour commissioner. Apparently, the legal opinion is that that is not possible. Can the Minister confirm the situation? If so, is there sufficient headroom to cover the shortfall?
I return now to the Stormont House Agreement. There is a figure of £350 million of additional borrowing to support capital investment projects, and £100 million from borrowing is provided for 2015-16. I would appreciate some detail on what has been planned for that. As we touched on last week, the £30 million change fund is intended to stimulate innovation, improve outcomes for citizens and generate savings. Will the Minister advise whether that is a brand new approach, or will it turn out to be a continuation of previous or existing schemes?
Finally, I ask the Minister for an update, if he can give it to me and, indeed, the House, on EU funding, particularly INTERREG V, which is likely to assist in the 2015-16 Budget.
Mr Lunn: I am glad to be able to speak on the Budget. Alliance has made clear its concerns. We are not convinced by arguments that it addresses the financial challenges looming on the horizon. We have opposed the Budget at various stages, so far, but we acknowledge that the Bill implements a Budget that already has political support from the Chamber. So, we are accepting our Executive responsibility to ensure that a Budget is passed, and we will not oppose today.
Nonetheless, our concerns are amplified by the recent announcement on corporation tax. The Stormont House Agreement required us to agree on a fair and sustainable Budget so that corporation tax could be devolved. Since then, the UK Government have produced a draft of the Bill that would confer those powers on the Assembly. However, that would be a significant decision and one with a significant financial impact. We have all heard the estimates, which, at the moment, appear to range from £250 million to £300 million per annum. That is a sum that, under EU law, we would have to find from within the Northern Ireland Budget, with costs, presumably, taken from all Departments. In addition, a reduction in corporation tax would need to be accompanied by investment in skills and innovation to ensure that the reduction was the start and not the end of the process to grow the private sector. However, before any Executive could agree to including such a spending commitment in a Budget, they would need a clear and costed plan. So, we are highly concerned that the Budget for 2015-16 makes no significant movement towards making the kind of reforms that could allow for an alteration to the level of corporation tax.
Of course, such a commitment would take place against a background of further reductions in the block grant, regardless of the colour of the UK Government after the next election. That is why this Budget's failure to tackle significant reform or make progress on the cost of division is deeply worrying. In all areas where the most significant reform is required, the DUP and Sinn Féin are essentially offering protection to the relevant public bodies, which has the practical outcome of frustrating efforts at further reform. As mentioned, for example, the implementation of Transforming Your Care (TYC) is not proceeding fully. Any reform programme requires upfront investment, and Transforming Your Care has blatantly not received that. The recent Donaldson report reinforces that. On top of that, the Minister has given health a significant uplift in spending. However, if the health system is not reformed, it will require an uplift every year, for no other reason than the simple reality of an ageing population with increasingly complex requirements.
That is a problem across the Western World. I hear the figure of a 6% uplift perhaps being required year on year from now until 2025, and that is clearly beyond our means, so we have two options: either try to meet that or implement Transforming Your Care. When £79 million was made available by the UK Treasury to the Northern Ireland Executive, almost all of it arising from an uplift in National Health Service spending in England, I understand that we did not allocate any of it to health.
I notice that a Sinn Féin motion is to be debated next week along the lines of reductions in the block grant and the need to explore additional revenue-generating powers that have not been explored fully as part of the Budget process. I am glad that one of the two major parties is beginning to see the light, because we will inevitably come to that at some stage. We have some sympathy with — I think that it was Edwin Poots's suggestion at the time — the reintroduction of prescription charges possibly to pay for the very necessary cancer drugs that we do not have over here. The fact is that we had £79 million on the table, yet we have not used it for that purpose. As a result, I understand that regionally identifiable public spending on health in England is 22%, yet here it is just below 18%.
Likewise, the education system in Northern Ireland ensures that there is a duplication of services and enough surplus places to draw funding away from front-line services and into administration, yet the Department of Education is being protected, ensuring that such inefficiencies can be protected. Where progress was made, as it had been by the Minister for Employment and Learning on teacher training, the Executive overruled the Minister and decided to spend additional money on reinforcing division.
I am sorry, Mr Principal Deputy Speaker, but I am suffering slightly today.
By way of comment on teacher training, I want to make it clear, before anybody jumps up, that I am not talking about St Mary's; rather, I am talking about the overall teacher-supply situation. Last week in the House, the Minister of Education said that he had reduced teacher training places over the past number of years by 30%. Just this morning, he very helpfully answered a question for written answer from me. I will give you the figures for the approved intakes to initial teacher education courses: in 2014-15, 600 places; in 2013-14, 600 places; in 2012-13, 600 places; in 2011-12, 663 places; and in 2010-11, 663 places. I could go right back to 2007-08, when there were 699 places. Members probably get the point that I am making, which is that there has not been a reduction in teacher training places at all.
The other side of the argument is the number of teachers who have obtained a position in Northern Ireland between their graduation and now. The Minister very helpfully sent me an answer to a question on that subject as well today. If you take the year of graduation as being 2010, the number of North of Ireland graduates who have been employed on a permanent or significant temporary basis is 57%. If you take it as being 2013 — more recently — only 23% of graduates have obtained a place, and those are not even full-time places. They are of a significant temporary nature, which is for one term or more, and the percentage includes full-time and part-time teachers. It also presumably includes the 200 who are on the signature project, which is about to come to an end. When we talk about an oversupply of teachers — I am directing this not at one particular institution but the overall situation — there is a colossal expectation that is not being fulfilled. In my opinion, it is also a colossal waste of money, which is why I raise it. It is precluding other university places from being granted because we are supplying too many teachers.
The list of unresolved reforms is quite long, but there are some examples of success. If Stephen Farry had been allowed to proceed, that would have been one of them. Dare I say it, the other Alliance Minister, David Ford, has embarked on a programme of prison reform that has a similar effect. The failure of this Budget to address such reform makes it much less likely that we will be able to present a credible and costed decision on corporation tax in the near future.
As I said, we will accept the Budget on the basis on which it is now offered but with considerable misgivings. We hope for better days next year. I appreciate that this is a one-year Budget, but the problems coming down the track at us cannot be ignored. The Minister knows that, so we will see where we are in a year's time.
Mr Weir: Listening to the Member's cheery analysis of the situation that we are facing in Northern Ireland, I was glad that he does not have a part-time post with the Samaritans.
As we approach what is effectively — the Chair of the Committee referred to this — the fourth Budget debate in a matter of a few weeks, the general point that has been raised by a number of Members is that we should seek some sort of reform of the process. The fact that there is a degree of regurgitation makes that case. While I am in favour of memorandums of understanding and, indeed, general reform in that regard, we should not kid ourselves that there is some form of utopia out there in terms of the Budget process. The reality is that the value of any change will only really be gained through the way that each Department deals with its Committee — if they operate in a full, open and transparent manner as well.
Obviously, when we get into the fourth debate in the space of six or seven weeks, there is a major challenge for any of us, particularly those on the Finance Committee who have probably spoken in each of those debates, to find something novel to say — dare I say it, to find something interesting to say. That is a challenge that I have no intention of meeting. I can reassure the House that I will not be saying anything either novel or interesting today. I will try to stick to that mantra throughout.
Another issue that was raised by the Chair of the Committee — I appreciate that he was speaking in a personal capacity — was about ensuring that policies are rural proofed. While I think that is important, we need to ensure, not just with the wider Budget but with departmental spend, that we have equitable spending across Northern Ireland. To that end, we often hear about the needs of various city communities, understandably enough, and we hear about rural needs. Those of us who come from suburban Northern Ireland and who do not really fit into either of those categories would make a case that we should not be left behind as a result. Rather than pigeonhole ourselves into particular locations, we need to ensure that, across the board, we have equitable spending.
Given the Budget process that is facing us, including some of the constraints and because this is the last full year of this Assembly, I think there was a great temptation for the Finance Minister to essentially take what has happened with previous Budgets and simply roll it forward, with no cognisance of any need for change. There was a temptation to tread water. I do not believe that we are faced with that today. As I highlighted on previous occasions, many of the initiatives that are being put into effect through the Budget, such as the change fund and other funds that have been located, or the broader reform of public services and the embracing of a voluntary exit scheme, for example, show a commitment to radically looking at things again. There is no doubt — it has been highlighted by a number of Members — that we are very much in an age of austerity in which the block grant, in real terms, has shrunk over the last few years and is likely to shrink again. Again, the temptation for Departments will simply be to see where they can salami-slice what they have at present and not make any radical change. I believe that what is contained in this Budget is the opportunity for the much greater change that has been highlighted.
It is also a Budget that is consistent with the broad economic sphere. I have some sympathy on the issue of how we fund, in particular, specialist cancer drugs, and I think that that means that there is a need for a look again at prescriptions. Leaving that aside, I think that the temptation has been resisted to simply say, because the Budget is under greater strain, let us look at where we can squeeze whatever additional bit of money out of hard-pressed taxpayers and ratepayers. We have had an Executive and a Finance Minister that have operated on the basis of ensuring that burdens of taxation on members of the public and on businesses are kept to a minimum. That is replicated in the Budget, so that the temptation that could have been there has been resisted. At times, some members of the Alliance Party have suggested massively ramping up regional rates as a device to do so. Obviously, Mr Lunn is a dissenting voice on that.
Mr Lunn: I want to query that we have suggested massively ramping up. That is completely inaccurate. We are trying to be realistic about it, and I think that Sinn Féin at least and perhaps, eventually, your party will come to the same conclusion.
Mr Weir: Speaking of realism, the impact of a 1% rise in regional rates is that that would maybe generate another £5 million or £6 million. If we are to radically change things on that basis, the only logical conclusion from the Alliance's position is to increase that by a massive amount. That is not something that this Executive have done, and I think that they are right. I have some sympathy for the point that we had a non-domestic rates revaluation, and, as Paul Girvan said, it is an attempt to try to rebalance things to a certain extent. Inevitably, it will produce winners and losers, and it may be open to question that that has been entirely fair in each individual case.
I took a little bit of exception earlier on when the Chair of the Committee, possibly speaking in a personal capacity, mentioned the sterling work that one of the members, Mr Flanagan, had supposedly done in Fermanagh, hosting a meeting on rates revaluation. At the same time, his colleagues were putting through an increase in Fermanagh rates of over 5% this year. That was opposed by my party and the Ulster Unionists and some of the SDLP. People have to be absolutely consistent. I think that we have a Budget that is consistent. It seems that, at times, others are not particularly following through in connection with that.
I welcome that the Budget secures a range of much-needed projects. As has been highlighted, this year's Budget does contain £26 million of SIF money. Without rehashing the arguments, that is precisely the full amount that another party, had it been successful, would have cut every penny from, including the projects for which there were legal requirements, so I welcome that.
While it has been somewhat belated, and an earlier agreement being reached could have saved the Executive a considerable amount of money, I welcome the fact that, with agreement on welfare reform, we have a situation where welfare reform is going ahead with, effectively, an identified financial safety net to ensure that the most vulnerable in our society are not disadvantaged. That is a genuine safety net and is unlike the way that some in the House would present it when they say that there is nothing really there to cushion the blow. There is a set amount in the Budget. Nor, indeed, as some others have criticised, is it a blank cheque. A specific amount has been set aside, and I welcome that.
I welcome the amount of money that has been set aside for health. Part of the wider challenge of change is where TYC and other things will be quite important. There is no doubt that there are major issues, not just for Northern Ireland but, essentially, across the Western World with health spend. I believe that we need the twin pillars of reform of health spend, which I think is happening, and to ensure that, as best as possible, front-line services in health are protected. Therefore, I make no apology for the fact that, in tough economic times, the biggest single winner out of the Budget is the health service, with an extra £204 million as part of this Budget going into place.
In terms of transparency of action, some of the criticisms have been from the Department of Education. Nevertheless, one of the changes between the draft Budget and the final Budget that we face today has been an acceptance of the protection of the front-line services that are being provided in schools. The £63 million, I think it was, that the Executive put in place, which was matched with what I think is an extra £17 million for the delegated schools spend coming directly from the Department, should mean that, while there are still pressures in schools, the radical pressures that would have led to wide-scale redundancies and a diminution in the services that are provided to our children in Northern Ireland have been avoided. As per some of the points that were made, I think that the Health Department, the Education Department and other Departments are in need of a shake-up and change. Nevertheless health and education are probably the two key front-line services that most people want to see protected as much as possible. I think that we have a Budget that does that. Finally, I turn —
Mr Lunn: I thank the Member for giving way. I take the point about the extra £63 million and the £17 million that was topped up for the Department of Education, avoiding an imminent crisis. Does the Member have any specific comment on what I said about 600 teachers a year being trained when we do not need anywhere near that number? Expectations are being raised. Even the teachers' pension scheme has been amended, so teachers will have to work much longer, which compounds the problem.
Mr Weir: First of all, the position on pensions is not unique simply to the teaching profession. As we have an ageing profession, unions have inevitably raised concerns, and there has had to be pension reform in a wide range of professions, particularly in the public service. We still have a situation where, to be fair, despite even those changes, the public-sector pension schemes tend to be the most advantageous in society as a whole.
There is a wider challenge to find a long-term structural change in teacher training. We cannot essentially engineer that by the back door, so simply taking action that impacts on a couple of teacher training bodies is not particularly strategic. That is why I think the Executive took the correct approach when taking their position on St Mary's and Stranmillis. We need a much more strategic point of view. A knee-jerk reaction of simply putting cuts in place does not bring that about. I agree that there is a longer-term need for the reform of teacher training, but we have to try to move forward as best possible on a wider scheme with consensus.
I will come back to the remarks that I made at the start on reforms to the structure. A memorandum of understanding, for instance, would be useful, but, unless it is accompanied by a very honest assessment from each Department when they present to Committees, it will have limited value. Not unsurprisingly, mention was made of the extent to which Treasury seeks to contain information so that nobody else has that knowledge. That has been something that Whitehall has faced. It is not a problem unique to Northern Ireland; Whitehall has faced it for many years. I think that we also see that in Departments at times.
Sometimes, Departments put a spin to their Committee, quite understandably, to try to establish why they should receive more money. As well as the Committee for Finance and Personnel, I serve on the Committee for the Environment, and we have seen figures presented there about a wide range of good things, generally speaking, that the Department does that will clearly lack funding. However, the figures do not take account of the fact that a very large percentage of the departmental budget will be spent simply on staffing. While it is acknowledged that some members will be part of a voluntary exit scheme, that is not taken into account when looking at those figures or, indeed, when looking at where some money can be diverted from, such as the carrier bags levy. I do not think that we are getting a particularly honest appraisal from the Department about its financial position. I want to say specifically on that, because we will have to face some decisions fairly quickly in connection to that in the Department of the Environment, that I would like to ensure that priority is given to road safety, albeit perhaps delivered in a different way.
I am concerned that many of the signals that have come from the SDLP, in particular, seem to highlight the rates support grant as being almost the number one priority, when, from a practical point of view, it is the equivalent of 0·5% in the overall local rate that is put in place. We need to see and ensure that that is prioritised when there is a freeing up of resources.
It is clear, as we move forward, that there is an important reform of public sector services of which the voluntary exit scheme is a key component. There are a couple of points to be made on that. First, as has been stated time and again and despite the spin put on it by others — to be fair, probably outside the House — the exit scheme is, by definition, entirely voluntary. Therefore, people will make a choice. Mr Cree, for instance, raised the concern, "What if we do not get enough people?". Those are not the soundings that I am receiving from people at the moment. From my experience of exit schemes in the past and the feedback I get at present, I would be surprised if we did not get the situation in which there were too many people looking out rather than too few. That is the feedback that I get. While I think that the change will make a high level of difference — we can debate and argue over that, and time will tell — in the past, in any voluntary exit scheme, the tendency has been that too many people have been interested, rather than too few. That may be something that we have to deal with.
I believe that what we have overall is a sensible Budget that actually looks to the future. As indicated in previous debates, it may well be that we will look back in a few years' time and see that it signposts directions for the better delivery of services for all people, ones that actually protect the most important aspects of society and its most vulnerable people. I therefore commend the Budget Bill to the House.
Ms Boyle: Go raibh maith agat, a Phríomh-LeasCheann Comhairle. I welcome the opportunity to speak on the Second Stage of the Budget Bill.
If we are to build a better, more democratic, just, fair and prosperous economy for our children, economic power is not optional; it is essential. The alternative is increased austerity, income inequality and poverty. The general election in Britain will not deliver an alternative for our people. There may be a change of rosette colours, but policies will remain the same. We can make the change. We can take economic power to build an economy of fairness, prosperity and democracy — the three pillars of any decent society.
Westminster governance is not delivering for our people. It means wage cuts for the low-paid and tax cuts for millionaires. Collectively, we should demand economic power from Westminster to build a prosperous North and a prosperous island, a fair society where hard work is rewarded and vulnerable people are protected. I believe that the majority of us want this. The argument that we are too wee and too poor to take economic power from Westminster is an insult to us. It is an insult to the intelligence, creativity and skill of every person living here in the North. Of course, those who make that argument do not really believe it. How can they, when it is just patent nonsense? They know that economic confidence is the key to economic power. Our task here is to build that confidence in our ability to deliver economic prosperity and jobs.
We can, together, secure the full financial powers to tackle inequality and promote competitiveness to allow businesses here to thrive. We can collectively stop hiding behind overestimations of the fiscal deficit and can together stop hiding behind the word "subvention", for austerity and raids on the block grant are no gift to the people of the North. We can stop hiding behind the net fiscal balance report under the pretence that it presents us with official statistics when we know that it is not recognised by the Office for National Statistics. We can, together, accept that the methods and data used in that report are not the same as those used in Scotland. We know that no Finance Minister in Scotland would stand over an estimate of VAT based on a survey of 147 households or 24 households per county.
We cannot afford to let Westminster continue to stifle our growth and squander the real opportunities for our people. We have vast potential for renewable energy, a successful food and drink sector and a thriving life sciences industry. We have some of the best universities in the world here and have produced some of the greatest entrepreneurs. We can be confident about our economic prospects, but it is our prospects under Westminster that cause us concern.
I have spoken about the talent and the resources in the North, but, for decades, Westminster Governments squeezed the living standards of our people, crushing talent and opportunity. As a result, we face an ever-widening gap between rich and poor. Two out of every 10 people in the North now live in poverty, and, without sounding full of doom and gloom, that is the reality. We have the biggest cuts imposed on us from Westminster. Britain is the most unequal society in Europe. Nowhere is that felt more keenly than here. We are locked into a system that exploits our people and wastes our resources. We face a future of ever-increasing social inequality.
Economic power means powers to create more and better jobs, better-paid jobs and more jobs for women and the power to attract more world-class companies to invest in Ireland, North and South. Taking power from Westminster is rational, reasonable and, indeed, responsible. It is about the best way forward for our people and the best way to build the fair, prosperous and democratic economy that we here strive for. We know that no one is more passionate about our economic future than the people who live and work here. No one else cares as much, and so it should be our people who take the decisions that will shape the lives of this and future generations. It is simple. We have every reason to secure economic power from Westminster; in fact, we have more than 1·8 million reasons. Let us deliver economic power and prosperity to our people. I support the Bill.
Mr I McCrea: Thank you, Mr Principal Deputy Speaker. This is my first opportunity to put on record my congratulations to you on gaining the position of Principal Deputy Speaker.
A lot has been said throughout the last few weeks in respect of the debates on budgets and whatnot. Rehearsing a lot of that today is probably unnecessary, and I will try my best to avoid it. There are some issues that need to be addressed. Michaela Boyle, across the way, tried to give us many a good reason why we should have more fiscal powers in Northern Ireland.
If we look at what we have and what we are due in the not-too-distant future when we will be dealing with corporation tax, we should take one at a time and see how we get on. Some Members believe that corporation tax should not be devolved, but the debate has long since moved on to the rate at which we set it.
We are looking at the wider context of our Budgets and how we set things. The Minister will no doubt look at rates and issues to do with rates. We need to address those as they affect people in our constituencies. In my constituency, I find it very difficult to understand why we talk about devolving more fiscal powers, given those that we have already, including the ability of councils to set rates. In my council area — the new Mid Ulster Council — Sinn Féin, backed by the SDLP, which holds the balance, increased the rates burden by 5·81% in Dungannon, 5·63% in Magherafelt and 2·74% in Cookstown. We are asking for more powers — Sinn Féin certainly has it on record that it wants as many powers devolved as possible — yet we cannot even strike a rate in councils in the best interests of our constituents or ask council officials to try to cut their cloth to ensure as low an increase as possible. No one will tell me, after 12 and a half years' experience, that there was never any cloth to be cut.
It is important, therefore, that we look at the wider context. If we are to devolve additional fiscal powers, we have to get better at exercising the powers that we already have, such as setting the rates. I understand that, in other council areas across Northern Ireland, rates have been cut or frozen. Mid Ulster and Fermanagh and Omagh councils are no different in having that responsibility. In the new Mid Ulster Council, Sinn Féin, backed by the SDLP, is more interested in the Irish language and other things than the delivery of key services. If that is the lesson to be learned from the way in which we exercise our fiscal responsibilities, I am not sure that everyone has grasped how best to do so. In the past few days, I have not heard from one constituent who is happy with the increase, and I, speaking on behalf of my party and the Ulster Unionist Party, which also opposed the increases, think that it is incumbent on those parties who voted through the increase to tell people exactly why they did so.
I contributed to one of the Budget debates, when an Ulster Unionist Party amendment proposed to take £26 million out of the social investment fund. I will not rehearse all the issues, but I still have not heard how the Ulster Unionists proposed to do that. Twenty six million pounds is allocated to the social investment fund. From my constituency's perspective, there is £1·4 million of committed spend. Had the Ulster Unionist Party's amendment been accepted, where was the £1·4 million going to be found? I discussed it with the Finance Minister, who told me that he had allocated £26 million — no other money — to the social investment fund. This is basic mathematics: if you take £26 million away from £26 million, there is nothing left. I still have not found a valid explanation of where we would have found the additional £1·4 million for the projects in my constituency.
All in all, I commend the Finance Minister for the efforts that he put in to bring us to this point. He spent many hours trying to ensure that we had enough money to pay for all the services and ensure that front-line services were kept, certainly in the education sector. I commend him for all the work that he has done, and I wish him well as he continues to do the job.
Mr Eastwood: You caught me by surprise, Mr Principal Deputy Speaker. I, too, congratulate you on your elevation. I do not think that I have had the opportunity yet to do so. I wish you luck in your role in the future.
This has been well debated and the arguments well made, so I do not propose to go through all of them again; I will focus on a couple of particulars. I want to pick up on something that Mr McCrea said about Mid Ulster. I have a lot of family in Mid Ulster, but I am no expert in how the rates process was set and what the money is being spent on. However, it is a bit disingenuous to say that the DUP voted against a rates increase that, like a lot of other rates increases, will be, in large part, due to the cut being made to the Environment Department, which has to be passed on somewhere. In large part, it has to be passed on to local government. That is —
Mr Girvan: In light of what the Member is saying, is he aware that other councils have been able to set a 0% rise and that other areas in the same council area receive under the review of public administration (RPA) a 4·7% reduction in their rates over the year? That comes down to the good management of budgets.
Mr Eastwood: There are many reasons why rates go up and down, but when you send a cut to councils — not all councils will have seen it because of the rates support grant — they have to decide whether to cut services, maintain services or increase rates. Unfortunately, at times, they really have very little choice but to increase rates. It is worse for some places than for others, and, hopefully, there will be some mitigation.
Somebody has done a nice little graph showing where the money has gone and where it has increased. Clearly, the DOE's budget has taken the largest hit. Mr Weir is right: it affects road safety. As we look at the Budget now, there is no money whatsoever for road safety, whereas, last year, I think that £2·2 million was spent on road safety. The Minister has committed to putting some money into road safety, but he will have to be very creative about how he gets the message out because very little money was left in the pot after it was raided. It is clear that local government has been affected. Poorer councils will be affected — in my council, it will be to the tune of hundreds of thousands — because of the different cuts and different grants from central government. We have to be mindful that we can all play politics in our local area, but when a cut comes as a result of a cut from central government, that is where the issue is.
Members should be honest in saying that they are voting for a Budget that creates a cut. Everybody knows that that is what it is doing, so to go to local councils and do something different is a bit disingenuous.
People will see through that and understand —
Mr I McCrea: The Member talks about people being disingenuous in how they vote on councils. Will he advise us how the SDLP voted on Omagh and Fermanagh councils, when, in this place, SDLP MLAs voted against the Budget? It was their right to do that, but, in Omagh and Fermanagh, SDLP councillors were split. Had they been united, the rates bills might have been a whole lot less.
Mr Eastwood: I honestly do not know what happened in Omagh and Fermanagh. I will gladly talk to the Member afterwards, and perhaps he can enlighten me on what went on. It would not be unusual for people to argue for their own area, especially at a time when we are merging councils.
I want to touch on something that we need to be aware of. I know that Members have talked about the Tories and about the British Government this and Westminster that, and I agree. The Tories have brought in savage cuts to our Budget and to budgets across Britain, but we have to be mindful of the fact that we are responsible for our budgets in the vast majority of public policy areas, so we have to take responsibility for our actions. My argument, coming as I do from west of the Bann and a city that has the highest unemployment rate — an unemployment rate that does not seem to be getting any better — is this: what did we do when we had the money, before the Tories came into power and made major cuts?
Where did we invest? Did we invest in the A5 or the A6? Did we invest in ensuring that the university at the Magee campus was expanded to 10,000 students doing the right kinds of courses for attracting investment? No, we did not. To stand up and blame the Tories is all very well, but we have to understand that, when there was money in the pot, we did not invest. Parties that are now saying that it is all the Tories' fault did not invest in the skills and infrastructure that we need to develop our economy.
I have big fears around some of the arguments that we are having now. In principle, I agree that the rate of corporation tax should be brought down to the same level as that in the Twenty-six Counties, but the difficulty with corporation tax being brought down to 12·5% without investing in infrastructure and skills is that we end up with no advantage whatsoever. I know, because I live in a place called Derry. We have a border at the edge of our city in three different directions, so we have a 12·5% rate of corporation tax. Businesses could come and set up in Bridgend if corporation tax were the sole attraction, but what we do not have is a university providing the right kinds of courses with the right numbers and the transport infrastructure to connect the city to the rest of the island. That is why lower corporation tax on its own does not work.
Ask the people of north-east Donegal, who have had corporation tax at a very low level for a long number of years. They have seen no impact from it, because the roads were not invested in at that end of the country and there was no investment in higher education to the proper level to attract the inward investment that we require. Whilst we can discuss the Budget, and we have, we need to be investing to save in the upcoming CSR period. We need to be investing in infrastructure, particularly in the north-west, and skills.
We send 5,000-odd students out of Northern Ireland every year; we need to stop doing that. We cannot say that we are going to support DETI to bring in foreign direct investment and then reduce the number of students in our universities. We should be increasing the number of students. Every other part of the world understands that, even in tough economic times, if there is only one place in which to invest, that should be higher and further education. That is the only way in which to attract foreign direct investment, encourage entrepreneurship and create jobs.
If we spend our time doing a great job with education and then, when they hit 18 , send our young people to Manchester, Liverpool, Dublin or London, they will never come back. Something like 80% of them stay within a 22-mile radius of where they go to university. They do not come home. We are educating children for export. My plea is that, if we do anything after this budgetary process, it should be to work out how we can invest in infrastructure and skills, because we will still be facing the high levels of unemployment in my city, in Strabane and in areas around there that we have been for years if we do not expand Magee and build proper and decent roads from Derry to Belfast and Derry to Dublin.
No matter how you tinker with the budgets or anything else, unless you do those fundamental things, my end of the North will be forever languishing in economic deprivation because we do not know what it is like not to have a recession.
Mr Principal Deputy Speaker: Before I call the next Member to speak, I make it known to him that, if he has not concluded his remarks before 2.00 pm, I will be interrupting him for Question Time. He will then be invited to speak immediately after Question Time.
Mr Ó Muilleoir: Go raibh maith agat, a LeasCheann Comhairle. That sounds like a tempting and generous offer, but I am hoping to finish by 2.00 pm. Deputy Speaker, many have congratulated you on your elevation, so I will do that as well. You have been here for quite a while now, like me, but congratulations on your appointment.
I want to touch on matters that would, perhaps, enhance the Budget on the basis that we have many pressing demands on our funds. When I last looked, the Minister had managed to put over £40 million into the new investment fund. Perhaps that has increased in the last seven days. I would ask him to explore, as part of the growth of the investment fund, the opportunity to attract funds from abroad. I am thinking in particular of pension funds, which would see an investment fund in this region as an attractive proposition. Of course, that would mean a loan that would have to be paid back, but I believe that the rates would be favourable and that it would give us that extra "za-za boom", I believe they call it; that extra push in our investment programme.
When the Minister was in kindergarten in 1995, there was talk of a peace bond. The Minister does not have the power to issue a bond, but we need to explore in an imaginative fashion how we could work towards a bond if we had the powers. However, it would certainly give our allies and friends across the globe, but particularly in north America, an opportunity to invest in building the peace and the economy.
The baby sister of the investment fund is the social innovation fund, which has only £5 million from dormant funds but hopefully will grow. Again, I ask the Minister to look beyond making that a fund from which voluntary, charitable or faith group bodies can borrow. Is there a way to match funds that are contributed by philanthropists? I am thinking particularly of the Community First programme in England, which runs until the end of March this year. The Treasury set aside £50 million and said that, if those with wealth came forward and wished to establish a fund, it would match it. If a generous individual came forward in Bristol, Manchester or London and said, "I wish to have a new fund with £1 million", the Government came forward with their kitty and matched that.
We know of the great work that the Community Foundation here does in making sure that funds that are donated by philanthropists are distributed to those in need and agencies that are tackling poverty and building the social economy. That may be something that we should do as well. There are other bodies and agencies that lend to voluntary and charitable groups, enterprise agencies and so on, but at this stage we do not, to my knowledge, have a scheme whereby if someone wished to contribute, perhaps to their local area, they could come forward with funds and we would match them. Through the social innovation fund, the Minister might look at that.
There is an organisation in the US called the Calvert Foundation. It asks individuals to lend it funds and it distributes those, usually to inner cities.
The Calvert Foundation model could be used around our peace lines. People who want to support the peace and build the economy could make small donations to our social innovation fund, have them matched by the Minister and see their money contribute to building peace.
Lastly, I want to echo the comments of Mr Eastwood. It always stops you talking when your name is mentioned. I echo his calls. I made it up to the city that I call "Derry", the Minister calls "Londonderry" and my esteemed colleague Ms Boyle refers to as "Greater Strabane". I was in Derry city last week, where I met representatives of the chamber of commerce and Ilex and the new CEO of Derry City and Strabane District Council. I make a plea to all the parties here: in the next Programme for Government, we really need to get our act together on the north-west; we need to expand Magee College and create the infrastructure. The potential with corporation tax powers is limitless. We could move into a new era of job creation, and, as part of that new era, there needs to be a new peace dividend and a new era for the north-west. Go raibh maith agat, a LeasCheann Comhairle.
Mr Principal Deputy Speaker: Order. As Question Time begins at 2.00 pm, I suggest that the House take its ease until then. The debate will continue after Question Time, when the next Member to speak will be Mr Mike Nesbitt.
The debate stood suspended.
(Mr Speaker in the Chair)
Mr Bell (Junior Minister, Office of the First Minister and deputy First Minister): From the outset, I will say that clerical abuse is no less important or emotive than institutional abuse. We are mindful of the equally destructive impact that it has had on many individuals.
Apologies, Mr Speaker. I have a bit of a flu, and it is man flu, which is the most virulent variety. So, I apologise for my voice.
The Health Minister has helpfully provided a range of detail on the services that are available. We have the domestic and sexual violence helpline, which is a 24-hour service that provides key support, advice and signposting for victims of domestic violence. We also have Nexus NI, which responds through the provision of counselling services to the needs of adults who have experienced sexual violence and abuse, and we have the Rowan. That is a sexual assault referral centre that provides services in the aftermath of a sexual assault, rape or an incident involving childhood abuse. Those services include a 24-hour advice and information line that anyone can ring.
There is also a range of psychological therapies and counselling that cover a wide spectrum of services in the statutory and voluntary sectors. In primary care, we are looking at establishing talking therapy hubs across the five health trust areas. In fact, they are currently being established. They will provide a range of psychological therapies and lifestyle support for people who are experiencing common mental health problems.
Mrs Dobson: I thank the junior Minister for his lengthy answer, despite his man flu. In what sense is it fair and equitable that two boys may have been abused by the same person on the same day but only one has access to the historical institutional abuse (HIA) inquiry? That is based not on the nature or scale of the abuse but merely where it happened.
Mr Bell: I think that the Member and the whole House supported the historical institutional abuse inquiry's terms of reference. It is a difficult issue, because, as I saw over two decades of professional practice, the impact on children who have suffered sexual abuse is exactly the same. Individuals will differ in how they respond to it, but the trauma is the same. Whether they have been abused by a teacher, somebody in the clergy or in an institutional setting, difficulties, psychological traumas and post-trauma reverberate from that. While not every victim will respond in the same way, the trauma is particularly difficult.
Why the House chose, I think correctly, to set the terms of reference in the way that it did for the historical institutional abuse inquiry was because those children did not have parents or caregivers to go directly back to. They had nobody else. They found themselves in a situation where their primary care was provided in those settings, and the inquiry is looking at abuse that occurred within those settings. That was the rationale for it, and I believe that the House chose correctly when it set that rationale for the historical institutional abuse inquiry.
It is vital that we provide all those others who experienced abuse in a range of settings, many within their own family homes and by people they knew, with the best services that are available so that they can be put on the process of healing. I have talked to many victims and survivors over the last number of years who are making a hugely positive impact on society. We need to ensure that the care and support that are needed to help with that healing are provided to them at the point of need.
Mr Lyttle: Does the junior Minister welcome the UK Home Affairs Committee's recommendation that the Kincora Boys' Home allegations be included in the UK independent inquiry into child sex abuse and the recognition that it gave to the Assembly's united position that that be the case?
Mr Bell: Yes, the question in relation to Kincora and the Westminster position on the historical institutional abuse (HIA) inquiry role is an important and critical issue. I know that the First Minister met the Secretary of State specifically on the issue. The Member correctly refers to the fact that on 30 September 2014, the Assembly unanimously agreed that the allegations of a cover-up by intelligence services and MI5, relating to abuse at Kincora Boys' Home, should be investigated by the Westminster child sexual abuse inquiry.
We are naturally disappointed that the Home Secretary did not do that, but we are pleased that the Home Secretary and the Secretary of State are fully committed to full investigation into any and all aspects pertaining to abuse at Kincora Boys' Home by the inquiry into historical institutional abuse here. On 8 January 2015, the HIA inquiry received a written undertaking from the Attorney General, Rt Hon Jeremy Wright QC MP, that any evidence presented to the inquiry relating to a matter within its terms of reference will not be used in any criminal proceedings against the person providing the evidence. The letter states specifically:
"For the avoidance of doubt, ... the undertakings cover any allegation of an offence arising under the Official Secrets Act."
The chairperson of the inquiry here is also satisfied that the assurances that he has been given will allow him to investigate all aspects of Kincora fully, even if they relate to evidence outside this jurisdiction. I hope that that answers the Member's question adequately.
Mr Attwood: Even since the last OFMDFM Question Time, the voice of victims and survivors has become stronger, meaning that, at the very least, a scoping exercise should be done in respect of financial redress. Indeed, I believe that many victims and survivors will meet Church representatives this very Wednesday in Armagh and that they will press the Churches on that point. In those circumstances, is it not the time for the First Minister and deputy First Minister to pivot, to respond to the growing voice of victims and survivors and to begin to scope out financial redress?
Mr Bell: I am not sure why the Member refers to the First Minister and deputy First Minister, given that the terms of reference for the historical institutional abuse inquiry were set by the House and by all the parties here, including his own. At that stage, we sought to do and put in place what we now have. What we asked, at that stage, was that the inquiry be allowed to complete its work.
Victims and survivors asked that the inquiry be allowed to act independently, so we have given it to an independent chair; a very distinguished chair, as the Member knows from his previous career. They asked that the independent inquiry would carefully examine the evidence and report back to us. The House agreed to all those terms of reference, and all the parties agreed that, when the inquiry is concluded and has heard all the evidence — let us be clear: evidence is still being heard — the chair of the inquiry would make a recommendation to the Executive about redress. That is the position that has been adopted and that we will be dealing with.
Mr Speaker: Before we move on, I inform Members that questions 6 and 7 have been withdrawn.
Mr P Robinson: The Executive's international relations strategy sets out a clear framework for our engagement internationally over the coming years. It aims to enhance Northern Ireland's international credibility and develop mutually beneficial relations with targeted regions around the world. Securing investment, improving trade and attracting tourists and international students to Northern Ireland are key to the strategy.
Our offices in Brussels, Washington and now Beijing play a major role in our international outreach. The work of the Washington bureau is establishing and developing important relationships with senior US Government representatives and has been integral to Invest Northern Ireland's unprecedented success in attracting US investment here. The deputy First Minister and I are looking forward to meeting key decision-makers and business executives when we travel to the United States next month to highlight the benefits of a competitive rate of corporation tax.
Our relationship with China represents an exciting opportunity for Northern Ireland. The Beijing bureau opened for business in September last year. We are already starting to see the benefits of direct government-to-government relations in the work of Invest Northern Ireland, the agrifood industry and the third-level education sector. The Chinese Government's plans to open a consulate general in Northern Ireland, based in Belfast, are at an advanced stage. That is further evidence of the growing confidence and mutual understanding between Northern Ireland and China. Within the framework of our international relations strategy, the deputy First Minister and I will continue to promote Northern Ireland as a great place to do business and to visit.
Mr McKay: Go raibh maith agat, a Cheann Comhairle. I welcome the work by the First Minister and deputy First Minister to attract investment, create employment and tap into the correct markets internationally. Will the First Minister provide us with an update on the work of the international relations working group?
Mr P Robinson: We have an international relations strategy and want to make an international development statement. Much work has to be done on international development, and we are working with the Committee in that respect. The international relations working group was established, I think, back in July last year as part of the Executive's strategy. Each Department is represented on the group. Its aim is to coordinate the international activity of Ministers and Departments to develop a corporate approach. That includes establishing communication links to best share information, the coordination of future international travel and diplomatic events and agreeing a set of key corporate messages. It continues to work, and we continue to improve our international relations.
In international relations, we use not only the fixed offices that we have with the bureaux in Washington and Europe, and now the office in Beijing, but we avail ourselves of the opportunity to use the various Invest Northern Ireland bases around the world and, where necessary, embassies.
Mr Weir: I thank the First Minister for the answers that he has given so far. Does he believe that the Executive could better harness the UK presence across the globe to promote Northern Ireland internationally?
Mr P Robinson: Nobody can do it better than ourselves. That is why, in the key areas, we have set up our own offices. For investment, there is a massive advantage in using Invest Northern Ireland's facilities, and we do that right around the globe. Everywhere we go, we visit the embassies. We seek to discover the extent to which they have promotional literature that helps Northern Ireland. It is not always the case, and perhaps we should pay more attention to ensure that all the embassies at least have the various documentation that they need, such as investment strategies and information on our education sector and others. It is not simply a case of the embassy selling Northern Ireland; we need to sell ourselves to the embassy. If any of our Members are on any foreign journey, it would be useful if they would call into the embassy in the area to discover for themselves how much that embassy is doing to tell the story of Northern Ireland and to report back to us.
Mr Dallat: Does the Minister agree that, in developing international relations, we should have in place a cohesive policy on international development? Can he tell me why, after so many years, the Assembly has yet to bring forward a policy on how we approach the Third World? I ask the question in the knowledge that Northern Ireland accepted millions of pounds from donor countries to rebuild our own society.
Mr P Robinson: Of course we work with the Government on international development. We also have an Assembly group on international development — I think that there have been some changes in that group — and we want to continue to work with it. We are working on an international development statement that I expect to come forward fairly soon. No matter what we say about how difficult times are in Northern Ireland, there are shades of poverty. If people think that we are having difficult times and that there are people in poverty in Northern Ireland, they should visit or look at other parts of the globe, and they will see the massive need that there is. In a region that has a relative abundance, we do well to remember those who are in much greater need than ourselves.
Mr P Robinson: Developing corporation tax-setting powers is a key commitment in the Programme for Government, as a wide range of evidence has shown that there is significant economic benefit to lowering the rate in Northern Ireland. While the legislation to transfer responsibility for the tax continues to progress through Parliament, consultation events are being held with key stakeholders on the technical aspects of the Bill. We remain confident that the legislation is on track to receive Royal Assent before the general election. Further preparations to reflect the changes in the legislation will then be required by HMRC and tax software suppliers, so a reduction in the rate will not be introduced until at least April 2017. However, as we already have a very strong talent pool, the economic benefit will be seen in advance of that date as indigenous companies and inward investors will increase their investment levels in anticipation of a rate reduction.
Mr Anderson: I thank the First Minister for his answer. First Minister, you touched on the possible date for the legislation for our corporation tax powers. When do you want corporation tax powers to become effective? What do you think the rate should be?
Mr P Robinson: The deputy First Minister and I have met the chief executive of Invest Northern Ireland and people from the Department of Finance and Personnel. It is fairly clear from an Invest Northern Ireland point of view that we would waste a massive opportunity if we were to wait until 1 April 2017, which is the date on which it could be in force in Northern Ireland. The potential for us to sell two years without any cost to our Budget would be lost if we were to wait until then. The advice from Invest Northern Ireland is that we should decide as soon as possible what the rate and the date should be, and give a clear commitment that we intend to keep that level of corporation tax for a long term.
Previously, the fear was that we would be faced with a bill in the region of £325 million for the first year of its operation. The indications from the last briefing that we were given are, happily, that it is now clear that that will be phased in over three years, with a likely reduction from our block grant of between £100 million and £150 million in the first year. That makes it much more doable. It means that we would not face the final and larger figure until about 2019-2020, which Treasury forecasts and modelling suggest as the time when we should be coming out of the period of austerity, and when we would get the full benefit of the changes under the Stormont House Agreement for the streamlining of our services and the costs in Northern Ireland. They would put us in a much better position to be able to endure that reduction in our block grant.
Mr Kinahan: If the First Minister looks at the three Programme for Government milestones and outputs regarding the commitment for corporation tax, he will see that the 2012-13 milestone/output of needing a Government decision through participation in a joint ministerial working group did not happen; the 2013-14 milestone/output to ensure that the required Westminster and Assembly legislation was in place did not happen; and the 2014-15 milestone/output on the need for an Executive announcement on the rate did not happen. So, in fact, we have had nothing but fail, fail, fail. We need corporation tax powers. Will things change? Will we see a better and more dynamic approach?
Mr P Robinson: Of course, the decisions on all of these matters were ultimately decisions of Her Majesty's Government; they were not decisions of the Northern Ireland Executive. However, it was his party that gave up and his party that surrendered on the issue. It was his party leader who stood in the Assembly and told us to move on and forget it, asking what plan B was and telling us that we were not going to get it. It was this party that stood by its commitment; it was this party that continued to try; and it was this party that succeeded in getting the commitments from Her Majesty's Government. He would be much better standing up in his place and congratulating us for what we have achieved than emphasising the fact that he failed, because he was the one who walked away from a commitment to get power over corporation tax for Northern Ireland.
Mr B McCrea: Does the First Minister consider corporation tax to be a volatile tax? If so, what safeguards will be put in place to make sure that, if there are large annual swings, we will be able to meet our commitments?
Mr P Robinson: I think that the Treasury will recognise that there is volatility, in that the level of profit that any company makes depends on a number of international events, some known and some not known. Clearly, there is that level of volatility, and the Treasury will want us to have in place a reserve fund to deal with that. We are looking at that issue, which, I suspect, will require us to have available a fund of somewhere in the region of £100 million. I just wish that, if we are to go down the road of looking at corporation tax, people would not always look at one column and not the other. Let us look at the positives — the benefits that flow from corporation tax. Let us look at the additional jobs that can be brought into Northern Ireland. Let us look at the international companies that are already here and which will increase their investment in Northern Ireland. Look at the indigenous companies that will be able to use the increased profits that they can hold on to in order to invest further and expand their business. That means more jobs and more spending power. All of those are the positive aspects that economists have recognised could bring about 50,000 additional jobs to Northern Ireland. Perhaps we can get our chins off the ground and start looking at the positive side of bringing corporation tax powers to Northern Ireland, rather than always talking about the doom and gloom of our economy. This is a good news story.
Mr P Robinson: The Stormont House Agreement sets out our commitment to look at the proposal for a pension for physically injured victims. Significant background work has already been completed on many elements of a proposed pension. The Victims' Commission has been tasked with providing a research report on the issues, and that has now been received by us. However, the report did not deal with eligibility, other than to look at types and levels of injury. That matter remains outstanding, and it is likely that it will be challenging to find consensus on it. Officials in our Department are considering all the issues that need to be addressed in relation to the introduction of a proposal for a pension for severely physically injured victims.
Mrs Hale: I thank the First Minister for his answer. First Minister, you are aware that many of the injured victims are now elderly, so this has become urgent. You will also be aware of my private Member's Bill on the issue. Can you give an assurance that your Department will work collaboratively with me on the case?
Mr P Robinson: Yes, I am aware of the details set out by the Member, and I commend her for her initiative in bringing forward a private Member's Bill. Knowing her background, I know that she feels very strongly about these issues and is keen to do everything that she can to assist. I do not expect anything less from the officials in OFMDFM. Obviously, there are political issues that they will not involve themselves in, but the Department will, of course, cooperate in any way that it can on the background information that she needs for her Bill.
Mr Hussey: I thank the First Minister for his response. I, too, like members of my party, am very concerned to see that people who were injured as a result of terrorist activity are compensated through a pension. How many people have been identified in the initial soundings as requiring a pension?
Mr P Robinson: I received a delegation some months ago, and I suspect that its figures were right at that time. Somewhere in the region of 300 to 350 people were considered to be likely and eligible, if the criteria were similar to what was initially set out in the consultation document put forward by my friend.
Mr Allister: It is clear from what the First Minister says that the stumbling block is the present obscene definition of "victim". Can the First Minister give an assurance that there are no circumstances in which a victim-maker who injured himself or herself in the pursuit of terrorism will ever qualify for a pension such as is being discussed here?
Mr P Robinson: I think that we need to be careful that we do not create a problem for the Bill as it might come forward. The issue will not be the definition of "victim". The issue will be about the eligibility criteria that are set down. There are tens of thousands of victims, and only 300 to 350 of those are likely to be entitled. It is those who are defined, even under existing law, as being victims who are eligible to go forward for the pension. I think that the consultation document that my friend has already published indicates the view that we take on those matters. There are others who have another view, and clearly the Assembly is going to have to decide on that, but I have no doubt that the Member and I will probably be in the same Lobby on the issue.
Mr P Robinson: The reduction in the number of Civil Service Departments and the reorganisation of their functions is a Programme for Government commitment. We believe that it is an important step towards having a more efficient Civil Service. The reorganisation should not be interpreted as a change of Executive priorities. It is important to remember that all existing functions will continue to be delivered and resourced in the new departmental context. We fully recognise the importance of culture, arts and the creative industries; indeed, we are proud of the esteem in which this sector is held throughout the world. 'Game of Thrones', for example, is a phenomenal success, and 'Boogaloo and Graham' winning the short film category at the BAFTAs last week is testimony to Northern Ireland's successful film industry.
Ms P Bradley: I thank the First Minister for his answer. As we know, most of the money for culture and the arts in Northern Ireland comes via DCAL, although there is considerable investment through other agencies, including those responsible for good relations and community engagement. Can the First Minister confirm that culture and the arts will be integrated into the Together: Building a United Community project?
Mr P Robinson: There is to be no change in the direction of any of the programmes as a result of the reduction from 12 Departments to nine. The same level of enthusiasm will still be there. In many cases, it will be the same people in Departments who will be moving across to carry out the same work. Reorganisation should not affect in any way how that work is carried out. I know that there will be concerns for some if a particular sector's name does not appear in the title of a Department, but whatever the departmental names turn out to be, I can give an absolute assurance that that will not in any way dilute the work that is being carried out or the importance that the Executive attach to it.
Mr Speaker: That ends the period for listed questions. We now move on to 15 minutes of topical questions. Mr Dominic Bradley is not in his place.
T2. Mr Allister asked the Office of the First Minister and deputy First Minister whether, in light of her consultation launch last Tuesday into what she calls an Irish language Bill, the Culture Minister had the approval of the Executive to launch that consultation and ought she to have had that approval, given the Bill's cross-cutting and controversial nature. (AQT 2102/11-15)
Mr Allister: Is the First Minister saying to us that a Minister is at liberty to waste public money on a consultation that does not even fit into the Programme for Government and that he and Executive colleagues, who were supposed to have stopped solo runs, are impotent to do anything about it?
Mr P Robinson: I am saying that the Member should be aware of the distinction between a consultation document and a decision. Any controversial decision has to be taken by the Executive, and any Minister is required to bring it to the Executive. We have a rule that no Minister is restricted in any way from going out with a consultation document. Each Minister must decide for himself or herself the best uses of resources in their Department and the likelihood of their consultation being agreeable when it comes back by way of a strategy. That is a decision that each Minister must make. I have not changed my position on the issue, and nor has my party. I trust that people will respond to the consultation and indicate that there are better ways for us to take forward expressions of culture than simply through an Irish language Act that would have massive expenditure attached to it if we were to go down that road.
T3. Mr Campbell asked the Office of the First Minister and deputy First Minister to outline, following the Stormont House Agreement, the importance that they would attach to dealing with the past. (AQT 2103/11-15)
Mr P Robinson: Our history in Northern Ireland shows us that, no matter how hard we try, the past comes back to trip us up. Therefore, it became vital, when we sat down to deal with a series of issues in the Stormont House discussions, that we tried sensibly to reach agreements where they were possible in relation to the past. I am glad that we have reached a series of agreements on how we address those issues and how we can give some hope to victims that they can be heard, their grievances can be properly pursued and we can seek to get at the truth.
Mr Campbell: On dealing with the past, can the First Minister outline what his view is of the former junior Minister Martina Anderson MEP, who, last week, talked about the killing and secret burial of Cypriots by the Turkish military being wrong, given the context that she was in an organisation that killed and buried people like Jean McConville, Columba McVeigh and others and would not tell people where they were for 20 or 30 years? Is that not brass-necked, 24-carat hypocrisy at its worst?
Mr P Robinson: I am sure that the Member, like me, rejoices in the fact that the Member of the European Parliament who made those remarks now recognises the hurt that is caused to families who are not aware of the whereabouts or details of their loved ones who were disappeared. I met recently the McConville family, and I have to say that it was a very sobering and serious occasion. Here was not just one life lost because of murder and the difficulties that arose from that in relation to the body not being discovered for many, many years, but the lives of the family in many ways ruined. They were separated at a young age, ending up in care and then finding themselves in circumstances where they were abused as children. I think that one can see the circumstances that they faced, so I hope that there is greater awareness of the impact on very real individuals. If it is right for those who point the finger towards Turkey to do so, it is also right for those who look closer to home.
T4. Mr Brady asked the Office of the First Minister and deputy First Minister to confirm that, although four of the five Executive parties — the SDLP, the DUP, the UUP and the Alliance Party — endorsed a provisional welfare agreement on 17 December, which did not include a multimillion pound supplementary payment fund, the four-party agreement did include a two-year loss of benefit sanction. (AQT 2104/11-15)
Mr P Robinson: The one thing that I can be absolutely certain about is that, on the principle that you never ask a question unless you know the answer, the Member knows the background details to the issue, and those facts are accurate. I am somewhat disappointed by the attitude of some parties in the Assembly to welfare reform. We should rejoice that we have managed to resolve an issue that had very real and destructive abilities for the future of the Assembly. Instead of reaching an agreement one day and trying to renegotiate it or vote against it or pretend to people outside that you are not really in favour of it, we would all be far better recognising our responsibilities and moving forward with an agreement that we reached.
I listened open-mouthed to the SDLP Member for Upper Bann, Dolores Kelly, on a programme at the weekend. I could not believe what I was hearing. If the Member were to do what she should do at the speed that she should do it, I would not like to be standing between her and the confessional. For anybody to suggest, as she did, that her party had not endorsed either the four-party agreement or the five-party agreement is totally misleading. Indeed, the facts go beyond simply agreeing around a table. Five party leaders took that document collectively to Stormont House where we sold the idea to the Secretary of State and she, in turn, to the Prime Minister. Do not let any party try to wheedle its way out of agreements that were reached by us all at Stormont Castle. We would do well to remember that, while there was a four-party agreement, ultimately, we agreed a five-party agreement that was much more detailed and had much more meat on the bones than the four-party agreement had.
Mr Brady: I thank the First Minister for his answer. I hope that he does not think that the supplementary question is rhetorical. Can the Minister further confirm that the multimillion pound supplementary payment fund and a range of protections, including top-ups for children with disabilities, adults with severe disabilities and the long-term sick, was included in the final Stormont Castle agreement negotiated between the DUP and Sinn Féin and later endorsed by the SDLP, UUP and the Alliance Party on 19 December? Go raibh maith agat.
Mr P Robinson: As I indicated in response to the Member's first question, the five-party agreement at Stormont Castle was much more detailed and precise than the four-party agreement. I think that I can do better: I can confirm to the House that at 1.55 pm, before I came into the Chamber, I ensured that a copy of the Stormont Castle agreement was placed in the Library of the Assembly. Therefore, Members will be able to look at the question raised by the Member and satisfy themselves as to what the correct response should be.
T5. Mr Beggs asked the Office of the First Minister and deputy First Minister to outline the timescale for social investment fund payments, which are only now hitting the ground, given that, of the £80 million committed in the social investment fund, only some £6·5 million has, to date, been committed in the Northern Trust area, part of which he represents, albeit that the Programme for Government originally had that funding being spent within its period, which will run out in six weeks’ time. (AQT 2105/11-15)
Mr P Robinson: The Member should look at the precise wording that he uses and choose his language more carefully. He said that, of the £80 million, only six point whatever it was had been allocated to his area. There was not £80 million for his area; the £80 million was for the whole of Northern Ireland, both capital and revenue. A small fraction of that was for each of the zones. I am glad to hear from him that the commitments have already been made in his area. A lot of this is rolling out much more slowly than we want or are comfortable with. I have two cases from my advice centre on Friday that I intend to raise with colleagues about the slow movement in either the Department of Finance and Personnel or OFMDFM. I am at one with him in wanting to speed the process up, but it is important that we have the proper checks in place, because we are dealing with public money and we want to ensure that it is used properly.
Mr Beggs: I thank the First Minister for his answer. I think that, if he reflects on Hansard, he will see that I never said that £80 million was expected in the Northern Trust area; I was simply reflecting the total amount.
Will he not acknowledge that it has been very slow to get to ground? In what time frame will this be delivered, and when will disadvantaged members of my constituency expect to see some benefit from it?
Mr P Robinson: Hansard will show that he said that, of the £80 million, there was only £6 million-odd in his area, clearly implying that a very small amount of the £80 million had been assigned to his area. There was a division among the zones. We have had countless discussions in the Assembly since then, and nobody has complained that we got the division of that money across the zones out of kilter.
Of course, we want it to happen as quickly as possible. If the Member wants to write to me or to see me about any particular project in his constituency, I am happy to bring forward our officials or, indeed, officials from the Department of Finance and Personnel to discuss the stage the issue is at and what can be done to speed up any particular project.
T6. Mr Byrne asked the Office of the First Minister and deputy First Minister to confirm that the bureau office in Brussels has four desk officers and one head of department and to state what benefits they hope to accrue over the next four years in our relationship with Brussels going forward. (AQT 2106/11-15)
Mr P Robinson: Mr Speaker, with your permission, I will ask my colleague junior Minister Jonathan Bell to answer this question.
Mr Bell: The work that we have been doing with the desk officers ranges across areas such as climate change, energy, competitiveness and employment. The success of the desk officers is in the strategic approach that they take to building contacts in the European Union and maximising the drawdown of funding for people here and for small to medium-sized enterprises and businesses here. The work that they have been undertaking with groups and businesses has always been critical in trying to ensure that small to medium-sized enterprises can plough their way through the very complex European legislation, which, for them, can be extremely difficult. In many cases, from examples that I have seen, it is about making that work manageable and making sure that people get timely information on what they are eligible for at the correct time. There are major funds out there that are simply overwhelming when they are looked at in the first instance, but, when they are broken down almost to chunk size, you can see that there are opportunities for Northern Ireland businesses. That is just one example of some of the positive work that they do.
Mr Speaker: We are almost out of time, but there is time for a very quick supplementary question.
Mr Byrne: I thank the junior Minister for his answer. Does he accept, however, that we need to maximise the opportunities that are coming out of Brussels? Does he further agree with me that Mr Gerry Mulligan has done a wonderful job? Can he confirm that he has been replaced by a new civil servant from Northern Ireland?
Mr Bell: Yes, I can, and I join you in paying tribute to Gerry Mulligan. I have been out numerous times, and, every time I have been out, a comprehensive programme has been put in place. We look for that work to be continued under the successor there.
Some major work has been done with Gerry. Last week, we were dealing with Safer Internet Day. When we were out previously, we got to speak to some of the key influencers in the European Union about a safer Internet and on trying to ensure that those who provide material on the Internet are actually held accountable for what they do.
A second example is that we went to look at the apprenticeships that are available, particularly in Germany and Austria, to see what we could do. I know that the Member will agree with me that too many of our young people are not in education, employment or training. Countries in Europe, particularly regions in Austria and Germany, are providing their young people with a different way forward, and young people are actively engaging with proper apprenticeships, leading to full-time jobs at the end of them, particularly in the engineering industry. Gerry, with the support of the desk officers, ensured that we could take all of that and make sure that we could maximise the potential for Northern Ireland.
Mr Speaker: Thank you. I thought that you were going to destroy your voice there.
Mr Hamilton (The Minister of Finance and Personnel): Managing attendance and reducing sick absence is a key priority in the Civil Service, and the work of all Departments in managing their sickness absence must continue and, indeed, intensify in some areas to ensure that the targets set out in the Programme for Government are achieved. I have asked my officials to review our Northern Ireland Civil Service policies and procedures and consider any changes or strategies that may be necessary to ensure that our ministerial targets are met.
Mrs Cochrane: I thank the Minister for his answer. Given that there are already a number of work/life balance initiatives, such as flexitime, in place in the Civil Service, which is more than what is on offer in the private sector, is the Minister concerned about the level of stress-related sick absence? Does he think that it could increase in the coming months when more restructuring and reform measures are implemented?
Mr Hamilton: I thank the Member for her question. The analysis provided by the Northern Ireland Statistics and Research Agency (NISRA), which measures sickness absence rates on our behalf, shows up a lot of interesting issues around the causes and is broken down by gender and work area. One of the more concerning statistics is that stress-related absences account for over 30% of working days lost. I am sure that everybody in the House will agree that that is a worryingly high number.
I appreciate that the Civil Service is no different to many walks of life and that members of staff will face stress and pressures in the work they do. It is a reflection of broader society, and the stresses and strains of life will then be reflected in our workforce.
The Member is right to highlight our policies around flexible working, work-share and job-share initiatives and so forth. That shows that, in the first instance, we would like to consider ourselves to be a caring and compassionate employer in the Civil Service, but there are also a range of policies in place to try to work around some of the pressures that people will feel in their everyday lives.
I appreciate that stress can be caused in any walk of life, but we are trying our best, as a Government, to mitigate some of the problems. That is done through routine intervention by the occupational health service, our employee assistance programme, which is delivered by Carecall, and all the other initiatives that we are actively trying to take forward to reduce levels of stress. I do not think that the voluntary exit scheme, by itself, should or should not affect that, but I appreciate that reform and restructuring in its broadest sense is a sensitive issue and needs to be handled with care.
Mr Girvan: I thank the Minister for his answers so far. What percentage of civil servants take no sick days at all?
Mr Hamilton: In the discussion around our high but falling levels of sickness absence in the Civil Service, there is sometimes an understandable focus and concentration on those who are off sick; but it is worth noting that, in the last full year for which we have statistics, which is 2013-14, the percentage of civil servants who took no sick days throughout the year was 55·3% and that was up from 52·3% in 2012-13. It is not often understood or appreciated that well over half of all civil servants take no days off a year. That figure has been consistent. What causes the figures to be worryingly high, although they are falling, is that, of those who are off, one in ten are off for an average of three months, thus distorting the overall picture. The Member raises a very good point. It is worth acknowledging that the vast majority of civil servants take no or, indeed, very few days off sick each year.
Ms Boyle: Go raibh maith agat. Will the Minister consider exploring new ways of providing stress management and stress-reducing initiatives? Will he take them forward in his Department?
Mr Hamilton: As I mentioned in my response to Mrs Cochrane's question, stress accounts for around a third of all sickness absence. Clearly, we want to focus on finding out the reasons for that and on putting in place initiatives and policies to alleviate it. There was a Northern Ireland Civil Service-wide stress survey in 2014, the previous one having been conducted five years before that. The survey is being managed by a cross-departmental working group, whose role is to develop a response to the findings on behalf of their Department and feed back best practice and shared experiences. We have found frequently from handling sickness absence that very good and, indeed, best practice in some Departments leads to a measurable decrease in the numbers of staff who are off sick. Sometimes that will not work in every Department, but the good practice that is going on needs to be shared across the board. Dealing with stress is no different. A Civil Service-wide stress action plan is also being developed and has been included as a key action point in the Civil Service people strategy, which we are now rolling out. We are very keen to do all that we can whether through innovative or new policies to address stress, in particular, and sickness absence across the board.
Mr Speaker: I inform Members that question 5 has been withdrawn.
Mr Hamilton: With your permission, Mr Speaker, I will take questions 2 and 12 together, as they both relate to the Northern Ireland investment fund. Members will recall that as part of the draft Budget I announced my intention to establish a Northern Ireland investment fund. I am pleased to report that significant progress has since been made. A DFP-led project board has been set up, which includes representatives from DSD, DETI, Invest NI and the Strategic Investment Board. This project board met before Christmas and will now meet regularly as the project advances.
The first key milestone in the establishment of the investment fund is the completion of a feasibility study. Consultants Deloitte were appointed on 3 February to take forward the study, and work is now under way. They have previous experience of advising on the establishment of similar funds and are well-placed to deliver the study. I expect this study to conclude in late May, and I look forward to considering its conclusions and recommendations.
Ms Sugden: Was the Northern Ireland investment fund created to provide a space for upgrading the electricity grid, which would in turn satisfy the policy on renewables?
Mr Hamilton: The feasibility study will hollow out in much more detail the areas for future investment from the fund. It will try to take a very long-term view of infrastructure investment. Energy production, energy efficiency and renewables are some of the areas of potential investment opportunities we identified in consultation with the European Investment Bank. Government has an interest in investment in these areas, as it does in other areas like social housing and urban regeneration, but does not always take the lead role. Energy production is one that it might invest in. I do not want to prejudice the outcome of the feasibility study or, indeed, what money might be given out of or lent from the fund in future, but there are any number of energy production projects or schemes rolling out across Northern Ireland or in the pipeline or at various stages of development that could avail themselves of this. Let us bear in mind that at the outset we hope there will be around £1 billion, primed by up to £100 million of the Executive's own funds.
Some energy production or infrastructure schemes would swallow up all of that £1 billion very quickly. It may be smaller-scale energy production projects at the outset. I stress again that this is very much a long-term fund. We want it to grow from £1 billion into much more. Therefore, the possibilities of what might be funded in the future are quite exciting.
Mr Humphrey: I thank the Minister for his answers so far. How will the Northern Ireland investment fund be financed?
Mr Hamilton: The Executive have agreed an indicative allocation of over £40 million to the investment fund in 2015-16 to kick-start it by getting some finances into its balance sheet. We hope that that will leverage in additional finance from, first and foremost, the European Investment Bank (EIB), which we have been working with incredibly closely on this project from roughly this time last year. I pay tribute to the EIB for its engagement and work in the genesis of the fund and throughout the last year. I look forward to its input to the feasibility study and to having it as a partner in taking the fund forward. The EIB and I are not against trying to draw in finances from elsewhere. Obviously, it is keen to top up what we put in. It has encouraged us to look at other opportunities to finance the fund; someone raised that issue during the Budget debate earlier. I do not want to get into details about who it might be, but we are beginning conversations with large-scale potential international investors that might be able to take the initial £1 billion in the fund up to a much higher level and, therefore, do much more for Northern Ireland in developing our infrastructure.
Mr McKinney: I thank the Minister for his answers. The fund is described as a leverage fund, but will he tell the House what the key strategic drivers are to enable that leverage to happen and inform the specific projects that would ultimately be picked?
Mr Hamilton: I know that it can sometimes be frustrating that there is a lot of process in delivering things like this. Although there is a feasibility study, some people might say that we should just get on with it and identify the sort of schemes that we want to fund. This is an absolutely essential stage. Whilst we indicated some areas of investment and infrastructure where it might be possible, including social housing, urban regeneration, energy efficiency and energy production, it is not limited to that. It might be limited in the short term because of the volume of money in the fund, but, in the longer term, as we leverage in more funding, there might be the opportunity to expand that even further.
We have an exciting opportunity through the fund to do things on a scale that we have not done before. From the public-sector side, we have used conventional capital to invest in infrastructure. Traditionally, that has gone to roads infrastructure, hospitals, new schools or whatever. This gives us the ability, on a large scale for a long number of years, to invest in other sorts of infrastructure that are of economic and social benefit to Northern Ireland. I look forward to the feasibility study and to dealing with many of the issues that the Member raised. It will give us the confidence to move forward with creating the fund, to leverage in finances from the EIB in the first instance and to try to work with potential international investors that might see the attraction of investing in Northern Ireland.
All of us will appreciate that there has been underinvestment in our broad infrastructure over the last 10 or 20 years. That is where there is a great opportunity for those investors, some of which we have already spoken to, that see the potential of investing in Northern Ireland. That will attract the sorts of players that have not really been in Northern Ireland or entertained investing in Northern Ireland in the past. It is a vehicle that will bring those sorts of players to the table.
Mr Hamilton: Plans to develop a voluntary exit scheme for the Northern Ireland Civil Service are well advanced. The Executive agreed the preferred option at their meeting on 5 February. It is intended that the scheme will be launched on 2 March 2015 and will be open to virtually all civil servants, including part-time staff, below permanent secretary and analogous grades. We anticipate that those selected to leave under the scheme will do so in tranches between 30 September 2015 and 31 March 2016.
The overarching objective of the Civil Service voluntary exit scheme is a permanent Northern Ireland Civil Service (NICS) pay bill reduction in the 2015-16 financial year and beyond. Civil Service Departments have advised that the pay bill savings they need to make via the voluntary exit scheme in 2015-16 equate to approximately £26 million, and around £88 million a year thereafter. This is based on the indicative number provided by Departments of around 2,410 full-time equivalent posts to be suppressed. These figures assume sufficient applications to effect this quantum of pay bill savings. However, due to the voluntary nature of the scheme, it is not possible to be definitive at this early stage on the numbers who will be released or the savings that can be generated.
The indicative pay bill savings were calculated using the median salary by grade of the total full-time equivalent posts required to be released to generate the required savings. Staff will be released in tranches throughout the period between September 2015 and March 2016. This means that the full six months’ pay bill savings will be realised only for those released in the first tranche, with savings reducing for those released in later tranches. The £88 million saving represents a full 12-month period when all staff have been released.
Mr Weir: Why was a voluntary exit scheme considered necessary rather than the alternative options that, as he outlined, were considered as well?
Mr Hamilton: The objective, as I said in my first answer, is a permanent pay bill reduction. That is, of course, in the context of trying to deal with significant pressures on our Budget next year. Even though those pressures were able to be closed somewhat by the allocation of a further £150 million in the final Budget, some Departments, including mine, are dealing with significant reductions next year. A permanent pay bill reduction is the number one objective.
It is worth reiterating that it is one of a number of strategic personnel interventions. The others include a recruitment freeze, an embargo on promotions and the suppression of what are called funded vacancies in Departments. Those interventions alone will save an estimated £30 million in 2015-16, which is very welcome. It is, perhaps, a little less painful than other interventions might be, but £30 million, while very welcome, will not deal with the pressures that Departments are facing. A voluntary exit scheme is necessary because it will achieve much larger savings and will do so much more quickly than a recruitment freeze might be able to achieve.
In addition, time is of the essence, and that is why we need to progress very quickly with the scheme. I am glad that the Executive agreed in recent weeks to proceed, which will allow the scheme to be opened to staff at the beginning of March. We are still on timetable to release the first tranche of people by around September 2015. That will allow Departments to realise, from the first tranche of people who go, six months' worth of salary savings, which will help them to live within their means and set them up very well to make a full year's savings in future financial years.
Mr Allister: I want to ask the Minister something that I have asked him in a question for written answer. He is notoriously slow to answer those, so I still have not had an answer. How long would it take under natural wastage and a recruitment freeze to run up the saving of 20,000 posts across the public service? That is, obviously, a key question in balancing whether it is wise to borrow £700 million to fund an exit scheme.
Mr Hamilton: I know that the Member has submitted a question for written answer. He will appreciate that, sometimes, the answers that come back first throw up issues that I would like to tease out so that I can give the Member or, indeed, any Member in the House a good answer and the answer that they want.
The leaver rate for the Civil Service is roughly 4%, which means that you would ordinarily expect just over 1,000 members of staff to leave next year for whatever reason, whether it be retirement or just deciding to go. The Member will appreciate, therefore, that releasing 2,400 people — Departments have identified that they need 2,400 fewer staff next year — would not be achieved by a recruitment freeze alone or by other measures. That is why I said to Mr Weir that time is of the essence. The Civil Service needs to release 2,400 people next year, and we would not achieve that by recruitment freezes alone. The same applies to the 20,000 figure across the whole of the public sector. Recruitment freezes and those other strategic personnel interventions will play a key role in getting us to 20,000, but, given the pressure that there is on public finances immediately — from the next number of weeks into the start of the next financial year — it is essential that, to realise those sizeable savings, we have a voluntary exit scheme.
I have no hesitation in saying that it is far from an ideal course of action, but it does reflect experience elsewhere. Whitehall had a voluntary exit scheme in 2010 and was able to reduce its size by around 10%. We have done nowhere near that, which is why we need to do what we are doing now. The simple answer is that, whilst recruitment freezes are part of the equation, they would not realise quickly enough the quantity of savings or number of people to leave the service.
Mrs Overend: Is there a preferred plan B that will need to be considered if the voluntary exit scheme is not accepted by staff or the desired grades in the Civil Service?
Mr Hamilton: I accept the point that there is a degree of risk in proceeding with such an ambitious and radical scheme over such a short period. One of those risks, as the Member identified, is that it might be undersubscribed.
My belief, and the anecdotal evidence, is that there will be no problems in the first year, or, indeed, in the first couple of years. It is a scheme over a four-year period, so there will be many for whom voluntary exit does not work or suit their circumstances now but may do in the third or fourth year.
The Executive have agreed to proceed with a voluntary exit scheme. They have not considered any other option at this stage, but if the scheme did not work or realise the savings that we are anticipating, we would have to look at what other options might be there. We would do that in the context of a changing budgetary environment. We have predicted the need to reduce the headcount by 20,000 over the next number of years, but that was done on the basis of Budget projections that were valid six months ago. The reality of the Budget in the future may change positively or negatively. Many things around budgets and the impact of the headcount need that we have in the Civil Service and the broader public sector are sometimes in a state of flux.
It is something that we will have to keep under review, but I do not think that there will be much escaping the need to reduce significantly the numbers working in the broad public sector in Northern Ireland.
Mr Hamilton: The Joint Ministerial Task Force on Banking and Access to Finance has met four times, most recently on 2 February. My key focus on the task force has been on ensuring that everything possible is being done to improve access to finance for local businesses. I am pleased to be able to say that the lending environment is improving, with more businesses successfully securing the finance that they need to prosper and grow. I also recognise that challenges remain for many of our firms. That is why I have been pressing to ensure that the benefits of national initiatives are being felt in Northern Ireland. Thankfully, we are seeing progress on that front. The uptake of programmes delivered by the British Business Bank in Northern Ireland is improving, with latest figures indicating that those have facilitated £40 million of lending and investment to businesses in Northern Ireland.
Access to finance is a crucial issue, and I assure the Member that I will continue to press for suitable initiatives where they could have a positive impact in Northern Ireland.
Ms P Bradley: I thank the Minister for his answer. Will he elaborate on and outline the volume of lending by banks to local business?
Mr Hamilton: A primary objective of creating the joint ministerial task force, which I sit on alongside the economy Minister, Arlene Foster, was to get better data on lending in Northern Ireland. Many of us in the House will recall that, when the crisis began, and there was a drop off the edge of the cliff in lending in Northern Ireland, whilst we knew that that was happening, we had no data to back up what we believed to be the case.
We have been fighting a long, but thankfully fruitful, battle to get better data published. We now receive much better data quarterly from the British Bankers' Association.
The latest figures available are for the third quarter of 2014, and they show that new approved borrowing by SMEs in Northern Ireland stood at £407 million. That was the highest quarterly amount since the data series started back in 2010, and it was 15% higher compared with the same period the year before. The approval rate for SME loans remains high, with over nine out of 10 applications being approved.
I appreciate that there will still be many issues, which is why the Executive, principally through Invest Northern Ireland, continue to have a range of products like the growth loan fund and the small business loan fund in the marketplace to assist those who still have difficulties with getting conventional finance from our banks. Those figures are testimony to the fact that, just as our overall economy is changing, so is the availability of finance to businesses. Whatever about the banks and what happened in the past, we need our banks to function properly if we want our economy to function properly, and all of us will welcome those very positive figures and the move in the right direction.
Mr McCallister: I am grateful to the Minister for his reply. He knows — indeed, he indicated in his reply — the importance of managing access to finance for SMEs, and I include our farming sector, which is going through a difficult time. Does he have an opinion on whether Northern Ireland needs more competition in its banking sector, more access to finance and more flexibility in the financial products that are on offer? Does he agree that there needs to be a rebuilding of personal relationships between customers and their banks and a move away from the mentality of "Computer says no"? I would be grateful for the Minister's views on that.
Mr Hamilton: In some ways, my view on the structure of the Northern Ireland banking situation is not going to change it. It is what it is. There has been an encouraging entrance of what might be described as "challenger banks". The interesting thing about that is that the challenger banks in Northern Ireland are the established banks in mainland UK. The likes of Barclays, Santander and HSBC are becoming much more active in the business market in Northern Ireland and are obviously backed by pretty healthy balance sheets. They provide some competition for the four local banks. Even though none of them are owned locally, they are the four big traditional banks in Northern Ireland, and they are getting some competition from those challenger banks.
The access to finance implementation panel that Arlene and I created made the point in its conclusions that we did not need to radically change the structure and that what we needed more of was different products, recognising that the lending environment had changed, probably utterly, so it is not a case of getting new banks to come into the market. I would not dissuade any new banks from getting into the market. If they want to come, that is perfectly fine — it is a business decision for them — but all banks, including those that are established in Northern Ireland, need to behave differently and produce different products. That is why, to reiterate the point, Invest Northern Ireland has moved into the space by providing products that can offer a bit of a bridge between what businesses can get from regular banks and what they need to take forward projects. Different products and a recognition that there are different ways to finance business growth are probably what need to be appreciated more than the need to bring more competition into the local market.
Mr Kinahan: Will the Minister advise on what actions have been taken as a result of the access to finance report that was produced by the independent economic advisory group last year?
Mr Hamilton: The access to finance implementation panel has produced a very good set of recommendations, many of which are being progressed. One of the key ones that we continue to progress between my Department, the Department of Enterprise, Trade and Investment and the British Business Bank is the proposal to develop a property overhang fund in Northern Ireland. As Members will appreciate, it is the overhang of bad debt around property that stifles the ability of many businesses in Northern Ireland to grow. Again, in an innovative and creative way, we are looking at trying to produce a product or a fund that would help to deal with that issue to allow those otherwise very solvent and very able businesses, which are capable of growing, to grow and to do so free from the property overhang that has been stifling their ability to do so.
Mr Hamilton: At a UK level, it is widely anticipated that the current trend of reducing public-sector budgets will continue in the short to medium term. In that respect, we should anticipate resource DEL reductions and plan accordingly. The precise impact of the forthcoming 2015 spending review on the Executive’s budget will ultimately be shaped by the policies of the incoming UK Government and the degrees of protection that they offer to comparable services such as health and education.
Mr Speaker: I apologise. We are at the end of the time for listed questions. We now move on to topical questions.
T1. Mr Hussey asked the Minister of Finance and Personnel for an update on the pay claim lodged by civil servants, given that he will be aware of the stress civil servants are working under and, with other Members, will acknowledge the stress suffered and bravery shown by those who worked in police stations and the Court Service during the Troubles; people who are still waiting for their pay claim, which is the subject of legal proceedings, to be settled. (AQT 2111/11-15)
Mr Hamilton: The House and, indeed, the Member will know and, I hope, appreciate that I have had huge sympathy for that issue since coming into office. Indeed, I tasked officials in my Department to look at the issue again and, as a result of that work, I brought a paper to the Executive that I believed was capable of resolving it. Unfortunately, that paper has yet to be tabled before the Executive, and, therefore, no decision has been taken. That is regrettable. There are some in the House who have pretended to support the very members of staff whom Mr Hussey has spoken about, but, when a proposal to resolve the situation was put to them, they walked away and have not allowed it to be taken forward. That is deeply regrettable.
I want to correct the Member in one respect — well, not correct him but point something out: there is no equal pay issue in this regard. That was clearly proven by the courts in the judgement by Justice Babington a couple of years ago. That does not take away from the very valid points that the Member and, indeed, many others Members have made to me. I recognise those points and hope that those who have at least verbally supported the calls by those members of staff in the past can now back that up with positive action.
Mr Hussey: I thank the Minister for his response. He is correct that, legally, there is no valid equal pay claim, and he has made that clear in many responses. However, the Civil Service staff concerned clearly believe that they have a valid claim. Will you advise the House if and when you think the matter will be resolved? Will it be resolved in the life of this Assembly? There are civil servants in distress that the matter is ongoing some five years after the initial claim.
Mr Hamilton: Having looked at the issue again and having brought forward an Executive paper that included a satisfactory way of dealing with the issue that, while not dealing with any legal claim — there is no legal claim — dealt with the need to recognise the work that was done, I recognise that that has not proceeded. As I said, I think that that is regrettable. I am hopeful that the changes to the way in which the Executive do business that were agreed in the Stormont House talks may allow the paper to be brought forward in a way that would not have been possible in the past. That does not naturally translate into automatic agreement on the paper, but I assure the House and, more to the point, the members of staff who may be listening to or reading what I am saying that I will bring that paper to the Executive when I am permitted to by the changes in how the Executive do business. It will then be up to those who have been holding it back to put their money where their mouth is on the issue. I hope that, in the not too distant future, we can get some resolution.
T2. Ms Lo asked the Minister of Finance and Personnel how he reconciles the Executive decision to continue funding the teacher training colleges’ premia with the stated Executive commitment to a strategic Budget, public-sector reform, addressing the cost of division and promoting a shared future. (AQT 2112/11-15)
Mr Hamilton: No one, including me, would deny that reform of teacher training in Northern Ireland is required, and I have heard many saying that in the House over the past number of weeks when the issue has been discussed. I would be one of the first to accept that we still produce too many teachers in Northern Ireland, with, I think, four institutions producing qualified teachers. There is an absolute need to reform the system. I do not agree and the Executive have not agreed with the way in which her colleague — indeed, my Executive colleague — the Minister for Employment and Learning has gone about trying to achieve the desirable aim of reform. You do not achieve change, in my view, in the way that Minister Farry brought forward his proposals. There was no consultation or attempt to bring the colleges with him. There was no political consensus in the House, where a motion was clearly passed with 80-odd votes in favour of the proposal not to cut the premia. Proceeding in a blunt and crude way by simply cutting the colleges' budgets in a very un-Alliance fashion, I have to say, by just doing it over the heads of those institutions and without consultation would have produced a perverse result. In particular, Stranmillis college, which is, of course, in the Member's South Belfast constituency, would have fallen by the wayside very quickly, and I do not think that that would be an intention or consequence that any of us would want. Maybe some wanted to see it, but certainly I and many in the House did not want to see that happen.
The decision that the Executive took not to cut the premia now gives us the space to work with the colleges. It also gives an opportunity for consultation with them to achieve the reform that is absolutely required but would not have been achieved in a way that any of us would have wanted by just crudely and bluntly cutting their budgets.
Ms Lo: I thank the Minister. As he has admitted, we train too many teachers. How can he justify using that excessive amount of public funding to fund teacher training colleges while neglecting other, maybe very crucial, areas of building up the economy, taking into account the need for skills building ahead of the reduction in corporation tax?
Mr Hamilton: There are many areas of higher education where we produce too many graduates; it is not just teacher training. I welcome the fact that universities have been reducing the number of places in what, I think, we would all agree are lower-priority areas for our economic development. That is a good first step in the direction of reform.
This is not a problem that has appeared overnight; it is a long-standing one. There have been unsuccessful attempts to resolve it. Frustrated as the Minister and many others might be, he might have achieved a reduction in the number of teacher training places, because it might have forced the closure of Stranmillis college in particular — something that I and many others did not want to see happen — but the best way to achieve a successful outcome that everybody buys into is to proceed on the basis that we have now created a space to consult the colleges, bring them into the tent rather than keep them outside and work with them to agree a way forward. If they fail to agree that way forward, the Executive and the Minister will have to look at other ways to achieve reform, but crudely and bluntly cutting their budget and forcing them into slow but certain decline and death is not the way to achieve reform.
T3. Mr Hilditch asked the Minister of Finance and Personnel what support he has afforded to the Pubs of Ulster campaign, which is calling on the Chancellor to reduce the rate of VAT for the hospitality sector. (AQT 2113/11-15)
Mr Hamilton: When I was on the Back Benches, not that long ago, I tabled a motion calling on the Chancellor of the Exchequer to reduce the VAT rate for the hospitality sector, as he is permitted to do under EU law. That would mirror the experience of the Irish Republic, where the VAT rate for the hospitality sector was reduced very successfully. My predecessor Mr Wilson followed that up with the Treasury about two years ago, and, in the last number of weeks, I have written again to the Financial Secretary to the Treasury, David Gauke, building on the campaign that the Member has highlighted, which is led by Pubs of Ulster but is backed by many other hospitality sector bodies in Northern Ireland and beyond, for the VAT rate for the hospitality sector to be reduced.
One of the points I made to the Treasury Minister was that my counterpart, the Irish Finance Minister, Michael Noonan, in his Budget in October, confirmed that VAT for certain parts of the hospitality sector in the Irish Republic would be cut indefinitely. The reason he took that decision was that an independent evaluation showed that the reduced rate of VAT for the hospitality sector in the Republic, where it is down at 9% for some categories, has increased employment through the creation of 30,000 new jobs and brought a benefit to the Irish Exchequer of €165 million. It is because of that compelling case that I want to back Pubs of Ulster, and the other organisations that are pushing for this cut, to see the same thing happen across the UK.
Mr Hilditch: I thank the Minister for his answer. Given that, are you hopeful that the rate of VAT for the hospitality sector will be reduced?
Mr Hamilton: There is now a broad campaign across the whole of the United Kingdom. We are not permitted to reduce VAT within regions of a member state; you can do it across the whole of a member state in the EU and specifically within the hospitality sector. The fact that there is now a broad-based campaign across the UK is helpful.
We have evidence from our near neighbours in the Irish Republic of how successful it can be, not just in boosting tourism numbers but in boosting employment and bringing a net benefit to the Irish Exchequer. That is the point that I would labour with the Treasury.
Yes, you will have a reduction in VAT revenue because you will have reduced the rate. However, because of the increase in employment, PAYE receipts, National Insurance contributions, and the profits that companies in the hospitality sector will make and the tax they will pay on those profits over time, it can yield a net benefit for the Exchequer.
Clearly, this is something that the UK Government will have to consider in the round of the pressures they are facing in public spending, just as we are facing pressures. I sympathise with my Treasury colleagues in having to take those sorts of decisions, but the fact that we now have good, strong evidence from the Irish Republic that the policy, when pursued, can work and can work substantially well, means that there is no reason why it should not happen across the UK.
T4. Mr Sheehan asked the Minister of Finance and Personnel for an update on his recent meeting with the Welsh Finance Minister. (AQT 2114/11-15)
Mr Hamilton: I regularly meet Ministers from other devolved regions. At the start of the year, I had a very positive meeting with Jane Hutt, the Welsh Finance Minister. It was a meeting that she was very keen to have to learn of the experience we had in the Stormont House Agreement. It was not a discussion about the very late nights and lengthy discussions but was about the results coming out of the Stormont House Agreement, particularly around financial flexibility and borrowing.
It is fair to say, and I am sure that Jane will not mind me saying it, that the ability to borrow to offset the resource pressures of a voluntary exit scheme and the ability to hold on to receipts from major asset sales and convert some of that into resource expenditure is of interest to the Welsh Government in their pursuit of more powers around borrowing. They have the ability to borrow only up to £400 million, whereas we have the ability to borrow £3 billion. Those are flexibilities that the Welsh Government, and, I am sure, the Scottish Government, are quite interested in and would like to take forward in their conversations with UK Government Ministers.
Mr Sheehan: Go raibh maith agat. Gabhaim buíochas leis an Aire. Has the Minister scheduled a similar meeting with his Southern Irish colleague?
Mr Hamilton: I meet regularly with Brendan Howlin, the Minister for Public Expenditure and Reform. I meet Michael Noonan regularly as well, but for budgeting, public spending and reform matters, it is with Brendan Howlin that I have most engagement.
He and I meet regularly at the SEUPB and North/South Ministerial Council bilaterals. We also meet in plenary session, but we use those opportunities to have broader discussions about our respective responsibilities. We have been taking forward work around reform and talking about the experience that the Irish Government have had in reforming their public sector and trying to learn some lessons from their experience. Equally, they have been trying to learn from our experiences of reform of government in Northern Ireland. It is a good, healthy, productive relationship, with a lot of shared and mutual interests. I want to keep it that way and continue to learn from each other on an ongoing basis.
Debate resumed on motion:
That the Second Stage of the Budget Bill [NIA Bill 45/11-16] be agreed.
Mrs Dobson: I welcome the opportunity to speak on the Budget Bill. I will split my remarks into two sections to broadly reflect what the Bill is seeking us to approve. First, I will look back at the year that has been, and, secondly, I will look at the year that now looks likely.
There is no doubt that 2014-15 was an immensely challenging year. The institutions faced one crisis after the other; in fact, they came close to what looked like a likely collapse on more than one occasion. The lack of political control at the top of the Executive was, unfortunately, repeated in a lack of control on their financial management. Of course, I am talking about the 4·4% in-year reduction that 10 of the 12 Departments were hit with, simply to keep key public services operating. There were a number of reasons for that, not least the ridiculous spectacle of the £87 million penalty that was paid to the Treasury. That, along with £13 million the year before, was money that the Executive could ill afford to lose, yet it did — all because one party walked itself into a corner for fearing what the voters of the Republic would think, only to, very publicly, roll over at the last minute, because after playing and losing their one and only card with the Prime Minister, they knew they had no other ideas or options left. Nevertheless, if some in the Chamber had had their way — I look to the Minister's party for this — they would have had all of us believe that all the in-year reductions were to pay for the fines. In reality, the majority was required to smooth over the deep and dangerous cracks that were appearing in the 2011-15 Budget. Some parties quite clearly decided to place political spin far ahead of being honest with the public.
Of course, the four-year Budget was always more of a calculated political agreement than any sort of genuine attempt to use public funds appropriately. The last Assembly was assured in late 2010 and early 2011 that the numbers worked and that those individuals or parties with even the slightest bit of doubt would be proven wrong.
This was the year that the Budget deal finally fragmented beyond all recognition of what was agreed almost four years ago. We need only look today at how different the final settlements were to those agreed. In fact, I ask the Minister if there has ever been a year with such in-year shifts of departmental budgets. It is not about scoring points, Mr Speaker. I am simply saying that it is about time that we had a little bit of honesty around what happened between early summer and autumn last year.
As my party's health spokesperson, I will make a few specific points with regard to the Department of Health's year.
Mr Girvan: Would it not be right to state that one of the biggest areas in which there was a difference was the capital end of things? It was in relation to your Minister, his reluctance to deliver the A5 and how that had to be dealt with.
Mrs Dobson: I thank the Member for his intervention, but I will move on.
As we are all aware of the fact that the Department ended with a £13 million deficit in 2013-14, despite receiving a further £100 million in monitoring rounds that year, it was clear that all was not well within our local health service even before this year had started. That deficit, however, turned out to be a relatively small problem for the Department, as its financial prognosis kept going from bad to worse. Only in late August 2014 did the then Minister gather the political confidence to accept that he had made a mistake and that the numbers in the 2011-15 settlement, which he and others had praised for so long, did not add up. He need not have warned about refusing to implement cuts, because, not long after his statement, he was unceremoniously out of office.
In my opinion, mistakes were made. It is unforgivable that the Minister and his officials waited so long to ring the alarm bells. They knew, by waiting well into the last year of a four-year budget, that it would be all but impossible to reallocate emergency funding without having a major and damaging impact on other areas. Had they spoken up earlier — the former Minister is responsible here — much of the pain could have been avoided. However, aside from a half-hearted attempt at TYC, nothing was done to avoid what happened this year. The Minister simply sat back and watched the local national health service walk into a major funding crisis. Whilst the Department eventually received significant in-year allocations, even still, they were either not enough or, more likely, came too late to mitigate all the damage that had been done. The decisions of each of the five health trusts are well known and do not need to be repeated here today. I stress, however, that decisions to scale back domiciliary care, to close minor injury units and to slash intermediate beds not only go against nearly every policy that the Department is meant to have but show an astonishing lack of financial insight. I have said this in the Chamber before: short-term gains for much, much longer-term pain.
As our health service prepares to turn from 2014-15 and looks ahead to 2015-16, the horizon, sadly, looks even worse. This will inevitably start to become clear in the few months between now and the Estimates in June. Whilst the budget settlement for next year included an additional allocation of over £150 million, that is entirely offset by £220 million of pressures being carried forward from 2014-15. In fact, the Health Department is forecasting its pressure increasing to £317 million, up again from £304 million this year. In addition, I note that the Department believes that it has identified savings opportunities and cost reductions of £164 million. Of that, the vast majority — £113 million — will come in the form of cash-releasing efficiencies and productivity gains in trusts.
In the absence of any new approach to organise our health service, I simply do not believe that all those savings from the trusts will be attainable. Whilst the Vote on Account is crucial to keep the service ticking along until the Main Estimates later in the year, if we are heading for another funding crisis in our health service, we should be preparing for it now, not in October. I hope that the new controls that the Executive and the Finance Minister have over the Department of Health spend, as unprecedented as they may be, will ensure that the scene last year on 21 August, when the former Minister set out his belated request for extra urgent funds on the radio, will not be repeated.
As we are in the process of granting permission for a large proportion of next year's spend, I want to turn to the specific issue of what has already been termed in the House as "the forgotten service": the Northern Ireland Fire and Rescue Service. The Minister will be more than aware of the concerns amongst Fire Service management and staff that they are, for some reason, not viewed by government as a front-line emergency service. Maybe that is because the Health Department does not have a definition of a front-line service, so I will take the opportunity today to ask the Finance Minister. His press release of 19 January talked about a Budget for next year:
"Supports frontline public services and economic growth".
However, it is a Budget that does not support the Northern Ireland Fire and Rescue Service. I assure the Minister that it is, indeed, viewed as a front-line emergency service by the general public, and rightly so. It is often first on the scene of some of our most horrific and life-threatening incidents. Its responses are time critical, and its dedication and training should be supported to the hilt by government. Personnel put their life on the line for everyone and should not be in any way hampered from doing what they are fully trained to do best: save lives.
Recently, I visited those who hold the front line of the Fire Service at Portadown fire station. I wanted to hear first-hand what was being proposed and how it would affect them and the service that they provide. I met an extremely dedicated bunch of individuals who care deeply for their community and feel that their voice is not being listened to when it comes to the Budget. They are the experts with the experience and knowledge, and their voices should be heard.
I know, having also spoken to Fire Service management, that they will continue to work to deliver greater efficiencies within the service. However, the proposed reduction in their budget of just under 10% forces decisions upon them, rather than allowing them to make changes and efficiencies that would not threaten the life-saving front-line service that they provide. I would be grateful if the Minister considered the current position of the Northern Ireland Fire and Rescue Service relative to its sister services in England and Wales, which plan their budget for the next five years. In Northern Ireland, because of the lack of detail, Fire Service management are unable to plan their budget for even the next 12 months with any certainty. Minister, urgent clarification is required. At this stage, we do not care who gives it to them — you or Minister Wells.
The men and women of the Northern Ireland Fire and Rescue Service, just like our medical staff and security services, are front-line emergency services and should be viewed in that way by government. Failure to do so is not only disrespectful to dedicated men and women who put their lives on the line daily, it is dangerous because it has the potential to lengthen response times and put lives at risk.
I have nothing but admiration for the firefighters whom I met in Portadown and for firefighters across Northern Ireland. I urge the two Ministers to look again at this forgotten service before it is too late.
Mr Hazzard: Go raibh maith agat, a Cheann Comhairle. I welcome the opportunity to speak in the debate. I welcome the fact that the central pillars of the Budget for 2015-16 are the protection of key front-line health and education services; investment to support economic development; and putting in place the foundations of the reform and restructuring of our public sector agreed as part of the Stormont House Agreement.
Sinn Féin will continue to provide security to public-sector workers through its policy of no compulsory redundancies. We place delivery in health and education at the very heart of our economy. Let us be very clear: the health service is a vital service that all of us will rely on at some stage in life, and it is, therefore, vital to protect investment in it. However, we need the Minister to get to grips with the financial department in the Department of Health. We need the better management of resources in the Department, and the use of in-year monitoring bids to create conditions around pressures in the Department of Health needs to stop. We need a reduction in negligence bills and fraud, and the eradication of frivolous court battles fought on a whim of the Health Minister.
Education, too, is a key tool in the battle against inequality. It is perhaps one of the most significant opportunities to overcome inequality provided in a person's lifetime. That is why we must continue to protect education budgets.
There is no doubt that, collectively, we have had to make some difficult decisions in order to live within our Budget. Since the Conservatives took power in Britain in 2010, their austerity policies have reduced our Budget by £1·5 billion in real terms. The Westminster Government's austerity economics are morally unjustifiable and economically unsustainable. British economic policy has failed, even on its own terms. It has failed to reduce the deficit as planned, and it has failed even more comprehensively to rebalance the economy. The human cost of austerity is too high a price to pay.
Sinn Féin does not accept that there is a trade-off between balancing the books and having a balanced society. Fairness and prosperity go hand in hand. Sinn Féin's approach is part of a growing international consensus. It is basic common sense that, as a society, we will do better if we can benefit from the skill, talent and innovation of all of our people. Since 2011, Sinn Féin has opposed welfare cuts and insisted on welfare protection. Sinn Féin is for equality, social justice and enterprise. We believe in economic growth, and we believe in competitiveness. That will not happen without investment in our communities, investment in training, investment in infrastructure and investment in job creation. A major strategy is needed to grow our private sector and to reindustrialise the North —
Mr McKinney: Can the Member explain how what he has just said is consistent with his party's decision last week to vote through the bedroom tax?
Mr Hazzard: I thank the Member for his intervention. I will come to that in a second.
A major strategy is needed now to grow our private sector and reindustrialise the North, but that should not be done at the expense of maintaining public services or the welfare of its citizens, especially those who are the most disadvantaged. All the other parties, including the SDLP, were prepared to compromise on welfare protections. As a result of Sinn Féin's determined refusal to back down on the issue, we ensured a better negotiated outcome and welfare system for the North. At its core is a six-year package of £565 million to create, among other mitigation funds, a supplementary payment fund specifically to protect children with disabilities, adults with severe disabilities and people who are long-term sick. Additionally, despite the political rhetoric of the party to my left, not a single person in the North will have to pay the bedroom tax. Anti-poverty measures have been retained, and the success rate for new disability applicants will be no less between the new system and the previous system.
Our approach is based on what Sinn Féin believes is in the interests of the people in the North and what is required immediately to assist us to build a just, fair and equal economy for the North and the island. We will continue to seek economic power from Westminster to pursue a different course from that of austerity, inequality and poverty. Sinn Féin wants to build an economy that is based on prosperity, fairness and equality, not cuts. Westminster promises only austerity, pain and hardship for our people. The human cost of the Union is now too high for our citizens to bear. The only way in which to end austerity —
Mr Hazzard: No, I have taken enough interventions for today, thanks.
The only way in which to end austerity is to take the powers to make our own economic future and to carve out an alternative economic path. The Tories are wedded to austerity. Left to its own devices, British Labour has made it crystal clear that it intends to carry on with the Tory cuts that are inflicting real pain on families across the North. In recent weeks, we have seen Labour and the Tories vote for £30 billion more in cuts. It is time to end the imposition of slash-and-burn economics in the North by the British Government. Collectively, we can seek the powers from Westminster to build a strong and sustainable economy. We can choose to leave austerity behind and actively work together to revive our economy here in Ireland. We must move beyond bookkeeping to driving economic growth. That means working collectively to exploit every avenue that we have to build a progressive, strong local revenue base that does not harm but strengthens our people, our competitiveness, our economic security and our economic growth.
Mr McCausland (The Chairperson of the Committee for Culture, Arts and Leisure): The Committee was briefed by the Minister in early October 2014, and, at that stage, members began to probe what the likely size and impact of the reduction to the departmental budget would be. At that stage, the Minister did not know the exact size of the reduction. However, she indicated that the departmental arm's-length bodies had been instructed to make plans for savings at a variety of different levels. The Committee ascertained at that stage that a strategic approach to budget reductions, rather than a simple salami-slicing exercise, would be taken by the Minister and her arm's-length bodies. The Committee also heard from some of the Department's arm's-length bodies on how they will seek to manage reductions to their budgets in the year ahead.
Throughout the budget reduction process, the Committee has stressed that reductions must be applied as part of a strategy that seeks to protect front-line services to our communities and to support the Department's stated objective of promoting equality and tackling poverty and social exclusion. The Committee began its scrutiny of the draft DCAL budget for 2015-16 on 25 November and heard from officials about the Department's plans for the allocated budget reduction. We were then briefed on the content of the consultation. The Committee subsequently received a summary of the responses to the original draft Budget consultation. In addition, at the Committee's meeting on Thursday, it received and considered a further budget paper from the Department. It sets out the Department's savings delivery plans, impact assessments of the budget reductions and risk management plans, as well as those of its arm's-length bodies. The Committee has also written to the DCAL's arm's-length bodies for more detailed savings delivery plans and will seek to be briefed on those in the weeks ahead.
Like all Members, I and the Committee would prefer that budget reductions did not have to be made.
However, Northern Ireland is subject to the same financial realities as the rest of the developed world and is subject to the same pain in the wake of financial crises that are beyond our control.
The Committee also considered reductions to the DCAL budget from the perspective of ensuring that no aspects of the Department's remit are so hollowed out that they are damaged beyond repair. That is not an easy task. DCAL has a relatively small budget, and the reduction may also seem small in terms of the overall Budget at the Executive's disposal. However, the Department is facing a 10% budget reduction compared with the 2014-15 budget, and that will inevitably cause pain.
The Committee welcomes the fact that the initial budget reduction was lessened by the Executive finding a further almost £2 million for DCAL. That will go towards addressing inescapable pressures in the Department and to NI Screen for its skills development work, including Cinemagic. Therefore, rather than the budget of £89·9 million as first anticipated, DCAL will have a current expenditure budget of £91·7 million for 2015-16.
As a result of delays to the Casement Park development, the DCAL capital investment allocation for 2015-16 will be £8·1 million, not the £54·1 million first envisaged. The Committee has put on record its concerns around the delays on Casement Park having a knock-on impact on the other aspects of the Executive's regional and subregional stadium programme. It is important to the Committee that work continues, and members were pleased to note an allocation of £630,000 for the development of the subregional stadium plan in the January monitoring round. The Committee is probing how that money will be spent and what work that will entail.
The upshot of the Executive's reconsideration of the DCAL budget means that the reduction amounts to 8·2%, rather than 10%. There will be a reduction to the Libraries NI budget of 7·5% and reductions of 11·2% in all other areas. The core departmental budget of £19·6 million includes the additional allocation for the development of the subregional stadium plan and £500,000 for essential building overheads at the Public Record Office of Northern Ireland (PRONI). The Department intends to manage its budget reduction through decreasing its pay bill by £1·4 million, reducing grants and programmes by £867,000, and reducing overheads by £100,000.
The Committee accepts the need for the Department to reduce administration costs to more manageable levels. Members hope that that can be achieved equitably and sensibly through a voluntary exit scheme for staff and other measures. The Committee will scrutinise reductions to the core programme budget in the months ahead.
We also commend the efforts that have been made by the Executive and the Minister to minimise the reduction to the Libraries NI budget. That will now amount to 7·5%, and it is anticipated that no libraries will have to close. However, temporary and relief staff will go, opening hours will reduce and the budget for new stock will see a considerable fall. The Committee has been a strong supporter of our libraries and believes that they are not only at the heart of our communities but that they can further be developed as venues and hubs for arts and culture. That could provide new revenue streams and, potentially, allow for longer opening. The reduction of almost £2·4 million will leave Libraries NI with a budget of £29·4 million for 2015-16.
The Arts Council sought to minimize the impact of in-year budget reductions over the last year on its clients by absorbing those internally. The Committee applauds that principled approach. However, it will not be possible for the body to absorb the £1·4 million budget reduction it faces in 2015-16. Over £1·1 million will be reduced from intended grants, as well as pay bill and administrative cost reductions of almost £250,000.
The Committee knows that the Arts Council intends to approach grants reductions in a strategic way that will seek to minimise the impact on the body's overall strategic functions, and members commend that. However, its budget of £11·1 million going into 2015-16 will create tremendous challenges, and the Committee is hopeful that an upcoming Executive arts and culture strategy may see greater cross-departmental funding of arts and culture, which could see overall funding for the sectors increase.
Sport NI's budget reduction for 2015-16 of just over £1 million will see decreases in grants and performance and coaching activities of £800,000; it will also see the body reducing its administrative overheads by £250,000. However, Members are aware that the body has exciting plans in the year ahead that will see greater cooperation with the new super-councils. It is to be hoped that economies of scale, together with the pooling of resources, will ensure that ambition in sport here will not be diminished.
The North/South language bodies and Waterways Ireland, while outside the scope of this budget reduction exercise, will see their budgets fall by over £1 million collectively, as agreed at the relevant North/South Ministerial Council (NSMC) meetings.
Armagh Observatory and Armagh Planetarium will go into 2015-16 with a budget of £1·4 million, a reduction of over £170,000 on this year. With such a small budget to start with, it is imperative that the impact of the reduction on the bodies' budget be carefully monitored so that it does not have a disproportionate impact. The Committee places considerable value on the work of those bodies and appreciates the global reputation that they enjoy.
As I have already indicated, NI Screen has benefited from additional funding from the Executive to ensure that inescapable pressures can be met. The Committee welcomes this. The Northern Ireland Museums Council must find savings of £30,000. However, the Committee is discussing options with the body, and the Department and members are hopeful that solutions can be found.
Inevitably, important programmes and projects are lost when budgets are reduced. However, we must all become more creative and collaborative in our use of funding and look to other sources of revenue. In that context, the Committee was briefed last week by the EU unit of Belfast City Council. There was a general belief that more could be done in accessing money and resources from that source. We were impressed by the unit's success in placing, effectively, this work — EU networks and policy development — at the heart of what it does. It really does provide a model that Departments and the new super-councils could learn from. There is no alternative to new ways of thinking about funding, and the Committee is keen to play its part.
We face difficult financial times, and it will be difficult for a number of these arm's-length bodies over the coming year. Nevertheless, we wish them well. The Committee supports the Bill.
Ms Lo: I rise as the Alliance Party's spokesperson on the environment. When departmental officials briefed the Committee for the Environment on 5 February, we were advised that, after meeting inescapable expenditure, the Department has only £1·4 million to fund a range of programmes and projects being carried out by councils and the private and voluntary sectors. The shortfall is over £8 million, although officials stated that the Minister would look at the £4·2 million from the carrier bag levy to see whether any money could be reallocated. This will be limited, given the already committed funding for projects and the restriction on how receipts can be spent.
Seeing projections from officials, it looks like the axe will fall mostly on activities that are currently undertaken by NGOs. I cannot emphasise enough the importance of the NGO sector in getting value for money for us by delivering government objectives in a cost-effective manner. Funding for this sector can bring significant added value through match funding and co-funding, accessing the passion and energy of volunteers, the involvement of students and people of all ages, and managing significant areas of land for public benefit.
The environmental sector is also of value to Northern Ireland in the retention of skilled and qualified young people. DOE cuts would inevitably contribute further to the Northern Ireland brain drain.
(Mr Deputy Speaker [Mr Dallat] in the Chair)
I understand from the Northern Ireland Environment Link that, within natural heritage grants alone, DOE funds around 50 organisations through grants and contracted services. Total funding in 2014-15 to those organisations is approximately £3·5 million. That is over 110 posts affecting more than 130 individuals. Within that relatively small government input, those NGOs tap into a volunteer workforce of over 350,000, manage over 314,000 acres of land for government benefit, spend over £20 million in the Northern Ireland economy and leverage in £3·20 for every £1 invested in core funding. The potential loss of those jobs in some of those organisations will have a detrimental effect on the local economy. Those organisations tend to be small and lack resources and they are likely to find it difficult to navigate through a period of sudden budgetary loss that may result in their closure. The kind of activities that will be affected are managing natural and built heritage sites; providing access to sites; education programmes; managing and improving habitat; protection of wildlife; developing research and knowledge; monitoring sites, wildlife and access; and enabling the public to access and understand the natural and built environment.
NGOs in Northern Ireland have been very successful in accessing non-government funds. A good example is the Heritage Lottery Fund landscape partnerships, of which there are now at least seven in Northern Ireland. They all draw in significant leverage. The leverage is, on the one hand, evidence of the quality and potential of the Northern Ireland environment and, on the other, a good example of what will be lost if the NGOs that have leveraged that input are lost. Furthermore, there are clear linkages between what the NGOs deliver in Health, Education, Agriculture and Rural Development, Regional Development, Enterprise, Culture and Leisure, and the community development aspects of OFMDFM. The same issue emerges in all those areas.
The environment is the foundation for our society and economy, yet it is taken for granted and not treated as the key resource upon which future well-being and prosperity depend. A relatively small investment in the environment sector could lead to significant savings across all those Departments. The environment sector has advised me that it strongly encourages DOE to look at ways to develop those relationships and to work in partnership with NGOs on delivery.
According to departmental officials, for them to fund the current programmes that are contracted out to councils, the private and voluntary sectors, as well as road safety campaigns, DOE would have to lose 500 posts to save £8 million from salaries. That is a third of the workforce. That is impracticable, if not impossible. As a voluntary exit scheme will not start being implemented until at least autumn 2015, the Department is unlikely to find the necessary money through staff reduction within six months of the next financial year. It does not make sense for the Department to lose one third of its staff, who are mostly professional or technical staff carrying out the Department's vital functions and services.
It is most likely, therefore, that the non-ringfenced areas of departmental expenditure limit will not have the necessary funding and that this will impact mostly on the NGO sector.
Looking beyond the next Budget, before discussions on how the DOE will be broken up and its functions absorbed by other Departments, it is important that the House again considers the urgent need to create an independent environment agency to ensure that our already neglected environment is not completely abandoned. The agency needs to be external to any Department so that it can hold all Departments to account for their policies and practices in relation to the protection of the environment, which is a responsibility for all in government.
Mr Clarke (The Chairperson of the Committee for Regional Development): I welcome the opportunity to contribute to this debate. I do not think there was anyone in this House who expected that the budgets for 2015-16 would not be tight, even though some of the pressure was released by the Stormont House settlement. What we in the Committee for Regional Development did expect, however, was a mature and detailed debate about the options available to the Department with a view to identifying the best solutions to the financial constraints placed on the Northern Ireland block grant. Instead, we got what the Committee described in its response to the Finance and Personnel Committee on the draft Budget as a sensationalist approach from the Minister and his Department.
What we got was a Minister who chose not to debate his budget but to run to the press to bemoan his lot. What we got was a Minister who was more interested in the sound bite than in sound financial scrutiny; a Minister more interested in getting his own picture on TV and in the papers than in providing the citizens of Northern Ireland with a picture of how to deal with these financial pressures. The current vice-president of America, Joe Biden said:
"Don't tell me what you value, show me your budget, and I'll tell you what you value."
Mr Deputy Speaker, if we examine the budget that the Minister for Regional Development brought to the press and announced to the world, we will be in a position to gauge his values and those of the officials advising him. He does not value the social and economic well-being of Northern Ireland, as he slashes capital and structural investment in roads. He does not value the quality of our water or the treatment of our waste water, as he slashes Northern Ireland Water's budget, thereby increasing the risk of an EU infraction. He does not value those living in isolation, as he allows Translink to accumulate more cash with not one but two above-inflation increase to fares and to cherry-pick the most profitable routes. He does not value the safety of the most vulnerable in our society, as he boasts in the press that tens of thousands of street lights across Northern Ireland will be lost.
The Department for Regional Development does not have the maturity to manage its budget, never mind debate it. Instead, it allowed and encouraged its Minister to indulge in begging-bowl politics. My colleague, the Minister of Finance, stated previously that it is unacceptable for Departments to manage their budgets in the expectation of additional funding through the Executive's in-year monitoring process, as the Minister attempted to do through the release of value of the Belfast Harbour Commissioners. This advice continues to be given to the Minister for Regional Development, yet in its consultation paper on the draft Budget, the Department clearly stated that it:
"will be reliant on the Executive’s in-year monitoring process to secure tens of millions of pounds of additional funding necessary for essential structural maintenance."
The Department will also need to get out the begging bowl to bail Translink and itself out of the mess it has made of budgeting for phase 2 of the Coleraine to Londonderry rail track. This is not the mature handling of a departmental budget, but a recipe for disaster, as evidenced by the release of value and the Coleraine rail track.
The Committee for Regional Development wants to, and has tried to, engage and debate with the Department on its budgets. We will continue to do so. However, the Minister and those who advise him must be willing to inform the Committee and bring options to the table. They must be willing to take the initiative and be innovative, not like the Department we have experienced with regard to its budgets, which is non-transparent, reliant on the begging bowl and resistant to change. It will undoubtedly be a tough journey, but it will at the very least be a shared one, and one that benefits Northern Ireland. The Committee is keen to take this path, and I hope the Department is too.
Mr Flanagan: Go raibh maith agat, a LeasCheann Comhairle. I welcome the opportunity to speak in the Budget debate and the agreement that was finally reached on the Budget. It is not an easy Budget. We certainly have a difficult task ahead in protecting public services. It is quite clear that we have received no gifts from those who are trying to drive our agenda in London.
The task of balancing our books, tackling inequality and driving economic growth has to be to the fore of our minds as we move forward. Tackling inequality starts with the economy and how we deliver public services. It starts with supporting businesses and creating sustainable employment, ensuring that people have access to a decent job and wage. The Budget prioritises education, skills and development, job creation and growing the economy. Growing the economy and tackling disadvantage was the number one priority of the 2011-15 Programme for Government, and this Budget follows on very much in that guise.
The final Budget makes additional allocations of more than £150 million. It prioritises Health and Education. The final Budget sees DEL receiving a total of £33·2 million in additional funding. DETI will receive £3 million, which will go to Invest NI, as well as over £7 million in the change fund allocation. It must be remembered that all that has been agreed against the backdrop of an austerity agenda from Westminster.
We want to build a society that protects our environment and promotes the life chances of every child, young person and adult in the North to ensure that they have the opportunities to fulfil their potential and develop their talents. Few, if any, countries in the world have the economic potential that we have here in Ireland, North or South. We have a talented and skilled workforce, world-leading universities and a modern college sector. We have a strong international reputation for producing quality goods and services, with notable successes in sectors such as food and drink, the creative industries, life sciences and modern manufacturing.
With the limited devolved powers that we have, our economic performance is improving, but far too many people still feel that they have to leave each year to get a job or further their career. Of course, some people will always want to travel and work elsewhere, but that must be a choice, not a requisite for those looking to succeed. I was looking through the latest spreadsheet from an Cumann Lúthchleas Gael, the GAA, on the number of people who have transferred out of their home club, and it is quite clear that emigration still presents a deeply worrying problem in rural communities. The number of young men and women who are transferring from clubs in rural parts of Ireland to England, Australia and America is a deeply worrying trend. We need to make sure that there are proper jobs and a well-built society for those people to return to.
With greater fiscal powers, our economic policy would be tailored precisely to our own needs to create jobs here and to tackle the barriers to employment by exerting control over tax, welfare and National Insurance. We would want to see improvements in productivity, employment and population. That would lead to additional tax revenues, which would help close the fiscal gap that we hear so much about.
Together we must put every effort into developing a more sustainable and balanced economy, and that means driving investment in science, innovation, skills and infrastructure, while encouraging a more enterprising and entrepreneurial culture. Our IT sector and professional business services show particularly strong growth, and we must build and capitalise on this. Invest NI does great work in promoting and creating jobs, but much more is required if we are to tackle regional disparities, as that is, after all, a Programme for Government commitment.
Recent figures I have obtained for job creation show that Invest NI helped to create over 2,000 jobs in Belfast but only small numbers in areas west of the Bann during 2013-14. There is a direct link between the number of visits by foreign investors to a given area and the number of projects and jobs that are located in that area. It is therefore extremely disappointing to me that so few visits take place to places like Fermanagh on an annual basis. We all know and are told ad nauseam, that you cannot force an investor to locate in a particular area. I might not agree with the principle, but I acknowledge that that reality exists. However, there is absolutely nothing stopping Invest NI using its substantial budget to better direct investors into areas west of the Bann that have been neglected since partition.
Everyone who comes to my county of Fermanagh falls in love with the place, and why wouldn't they? It is one of the most beautiful counties in the whole of Ireland. We have a great deal to offer visitors but also potential investors. Fermanagh has a highly educated, vibrant and hard-working population, with plenty of young people looking for employment opportunities. We have excellent schools spread across the county that help to produce a skilled workforce, which could attract investors if places west of the Bann were promoted effectively.
Fermanagh also provides a good work/life balance for people, with good opportunities for social and cultural expression. These are the types of positives that should be promoted about Fermanagh, but Invest NI will not give potential investors the chance to fall in love with the place. It should be using its substantial budget to incentivise investors into neglected areas. However, during 2013-14, the year in which £92 million was wasted hosting the G8, only three potential investors were brought to Fermanagh. Despite all the lofty promises that were made in advance of the G8, none of them has materialised. We got new paint on our bollards in Enniskillen, some temporary mobile phone masts were erected to facilitate those who were coming, and many run-down shops were given false fronts to present Fermanagh as a thriving county. The mobile phone masts have been removed, the paint on the bollards is chipping, and the closed shops remain closed.
Invest NI is failing Fermanagh. It has been given a substantial budget, year after year, but most of us west of the Bann speak out in a unified voice to say that we are not getting our fair share of investment. There are some dissenting voices to those remarks, but they do not stand up to scrutiny when you look at the facts. Growing a sustainable and balanced regional economy must become a political and social priority. It was a Programme for Government commitment, but some of the parties involved in this commitment seem to pick and choose which commitments they support at any given time.
The policies of the British Government are working for too few and denying opportunities to too many. We should not merely adopt their policies. Britain is highly imbalanced, and regional inequalities have grown alongside social inequalities. Britain now has the highest levels of inequality of anyplace in the EU. If we are to address this, we need to work together connectedly. We need to create an education and training environment that will equip our young people to fulfil their potential and maximise the opportunities for island-wide education and training.
We need to gain control of the tax system so that we can simplify it, close poverty gaps, create a progressive tax system, remove barriers to business development and maximise the opportunities from the island economy. We need to develop employment policy to bring together employers and unions to boost workforce participation and increase skills and productivity. Boosting our productivity by just 1% would create thousands of jobs in the long term and generate substantial tax revenue.
We need to address the scandalously uncompetitive price of energy for our manufacturing companies. We must tailor policy to boost key job-creating sectors in which the North has an international comparative advantage, such as in renewable energy and the agrifood sector. We need to reindustrialise the North and, indeed, the island as a whole. Our combined focus must be on strengthening manufacturing, promoting innovation and encouraging international trade and development. We cannot simply tell everybody to get a degree in computer programming and move to Belfast. That is not building a sustainable economy.
We must boost our infrastructure and transport networks. We cannot repair and rebuild our economy and our public services without maximising the returns for all our citizens, building sustainable employment opportunities across the North and the island as a whole and ending regional disparities, and job creation is central to this.
Our wider economy is too heavily focused and reliant on consumer spending, which is often driven by consumer debt, funded by extortionate payday loans and high-interest credit cards. Such economic drivers need to be adjusted, and we need to move to a more sustainable economic driver.
What are the priorities as I see them for Fermanagh in the coming period? I know that the Minister for Employment and Learning is working on a capital build for a new rural university on the site of the old Erne Hospital in Enniskillen. Anybody who visits Enniskillen now will see that most of that site has been cleared. There is a huge opportunity there for a shared services site on which we can have a range of public-sector services all located in the one place instead of, as some Ministers are trying to do, moving them to Omagh or Dungannon. There is scope there for the likes of a library, the jobs and benefits office and the Housing Executive to co-locate along with the further education college in Enniskillen. That would provide synergies for delivering public services and help to regenerate a part of Enniskillen.
The DEL budget has been given a considerable uplift from the draft Budget to the final Budget, but I have serious questions about how that has been used.
It is quite common for us to attack the Minister, but we might excuse him for this one.
Queen's has implemented a serious cut to the students' union and the student support mechanisms that it offers, yet there has been absolutely no mention of addressing the salary of the vice chancellor, who earns £250,000 a year and gets a house, a car and probably a driver. He also has a wine budget, but it is more important to cut somebody working for the students' union than to try to address those issues. Those are the types of solution that we want our universities to work towards. Instead of hammering students by campaigning on the radio for an increase in tuition fees, they should be looking at where substantial savings can be made closer to home without having an impact on front-line services.
The hospital in Enniskillen is constantly promoted as one of the great things that the Executive delivered in recent years, and it certainly is, but there are problems with it, too. We have simply built a hospital that may well become a white elephant unless adequate services and investment are put into it. The hospital needs an investment of between £1 million and £1·5 million to protect maternity services, which are under threat. At present, any expectant mother with an elevated BMI or diabetes is encouraged to go to Derry to give birth. That has to change. It is not good enough to tell mothers that they have to drive an hour and a half from home to have a child.
There are certainly enough people in Fermanagh, Tyrone, south Donegal, Leitrim, Cavan, Sligo and Monagahan to justify a fully functional maternity services unit in the Enniskillen hospital. We need investment in staff at the hospital to meet the standards in the 2012 maternity strategy. We need ST3-level resident cover in obstetrics, paediatrics and anaesthetics, as well as compliance with the review of paediatric health-care services in hospitals and the community. To do that, the paediatric resident on-call medical staff have to be at ST4-level or above. So, this investment has to be a priority. It has been sitting with the Department, the Public Health Agency and the Western Health and Social Care Trust for a considerable time. I encourage the Health Minister to put that investment into Enniskillen hospital at the earliest opportunity and to retain and expand maternity services there.
In wider terms, we are missing a significant opportunity in Fermanagh. More people from across the border availed themselves of services in the old Erne Hospital than use the current hospital. I cannot get my head around that because coupled with that has been the reduction of services in hospitals adjacent to the border in the South. Common sense tells you that more people would try to use a hospital near to them, so why have we not increased the number of people crossing the border to use our world-class hospital, as the Health Minister would, rightly, describe it? There needs to be a focus on attracting patients from the South. There were problems with the availability of insurance cover in the old hospital, but it is my understanding that all of those have been sorted out.
An increase in patient numbers would bring increased revenue for the Western Trust. It would also allow for services to be expanded in the hospital because clinical professionals would be able to build up more hours and deliver more services locally instead of people having to travel to Craigavon, Belfast or Derry for a routine clinic appointment. As far as I can remember, the logic for building the hospital in Enniskillen was the opportunity that it offered for patient cross-border mobility. Effective cross-border planning for our hospital is not happening yet, but there is still time.
In Fermanagh, people wait for up to two years for a routine hip or other orthopaedic operation. That is simply unacceptable. The amount of money that the Western Health and Social Care Trust, and probably the other trusts, spend on managing pain and providing often inadequate home-help provision for people stranded in their beds because there is such a lengthy waiting list for hip operations makes no sense to me. It does not make financial sense, and it certainly does not make social sense that you leave somebody lying there for two years, taking a wide range of pain management medication daily.
We have been told that the Health Department is implementing Transforming Your Care and invest to save in the long term. I do not see that strategic approach being implemented by some of our overpaid managers, who have amassed over £1 million in pension pots and earn colossal salaries every year. All the while, front-line staff, many of whom are paid below the living wage, have a claim for a very basic pay increase to meet inflationary demands rejected. That two-tier payment policy in the health service is not acceptable, and it needs to change.
In closing — I am kind of getting there — the Budget that we have agreed is not the Budget that we would all have wanted if we were starting from a blank canvas, but we must remember that we do not have the full range of fiscal powers to make the changes that we need to see here. Nobody got everything that was wanted out of the Budget, but the parties that are speaking against it and that may vote against the Bill do so without offering any alternative. To be fair to the Alliance Party, it proposed some alternatives, including an increase in tuition fees and the introduction of regressive water charges. Thankfully, the Executive have decided not to introduce those measures, and that will be the case as long as we are about.
Finally, I want to give the Minister something that he can address by touching on the impact of rates on businesses across the North. RPA has had a negative impact in some areas, and nowhere more so than in Fermanagh. However, the £30 million in rates conversions that he and his colleagues introduced have significantly softened the blow and reduced considerably any potential rates increase that domestic householders and businesses in Fermanagh face.
However, in the revaluation of non-domestic rates, which was recently announced, there were always going to be winners and losers. That is just the nature of a rates revaluation, but it is my belief that the rates system is unfit for purpose. It does not give any consideration to the level of profit that an organisation makes, which is unfair. Simply to take the estimated rental value of a building over a year and set that as the rates bill is not a good approach. We have businesses from completely different sectors paying the same rates, which is deeply unfair. There is a small restaurant and guest house in Belcoo that pays the same rates as a commercial bank on High Street in Enniskillen. I have spoken about that bank before, because it keeps charging me £42 a go in unauthorised overdraft fees. I will tell you this, though: the bread that I buy out of that restaurant is very nice, and I will not have anything bad said about it.
Such an approach is regressive and does not support our business sector. It is deeply unfair, and I implore the Minister to give some consideration to changing completely how rates here are calculated so that they are not solely based on the property that a business occupies and at least take some consideration of the level of profit that a business can make. If the Minister will oblige and is willing to grant me more time to bend his ear, I have put in a request for him to meet me and a number of business organisations.
I will leave it at that, in the hope that we get out of here at some stage this evening.
Mr Allister: In normal arrangements of government, you can usually detect from the direction of travel of the Budget of that Government what their values and ethos are, and you can see within it the pointers as to the policy of that Government. Mr Trevor Clarke, in a rare excursion into erudition, reminded us of something that Joe Biden said when he said:
"Show me your budget, and I'll tell you what you value."
Show anyone this Budget, and could anyone tell what this Executive value? It is such a mishmash of contradictions that it stands for nothing other than keeping those who penned it in office. That is the indisputable priority of this budgetary document: cobbled together to keep this place, and those who benefit from it, in office.
It is not so as to lay out a clear, dynamic way forward for Northern Ireland — oh, no. Rather, it is to say, do, spend and borrow whatever it takes to keep Stormont ticking over.
The document is so eminently contradictory. On one hand, we read in it that there is supposed to be, in accordance with the Programme for Government, a great desire and ambition to drive Northern Ireland forward economically. We then discover that the greatest innovation in the Budget is to implant in it, not for this year but for future years, the underwriting of overspend on welfare. I turn to page 14 of the Budget document and see the quite appalling chart of economic inactivity rates in Northern Ireland, which continues to have the most unenviable of positions: top of the league of economic inactivity. One just might have thought that, in consequence, this would be a Budget designed to incentivise people into work, but it is quite the reverse. It is a Budget to cocoon people on benefits. That, of course, has been the centrepiece of the Stormont House Agreement. Rather than following the path of incentivising people into work — oh no — we have conjured up, through borrowings and cuts elsewhere in the block grant, a spend of £565 million over the next six years. In consequence, I suspect, we will continue to have the highest rate of economic inactivity in the whole of the United Kingdom.
This is not a Budget of clear, dynamic direction; it is a Budget of trying to blend the inherent irreconcilabilities of rants about austerity from Sinn Féin and the timid attachment that some still hold to trying to build the economy. I suggest that what we have is exactly as I have described: a document of mishmash and muddle. It is also a document of further squander, because that will be the outcome.
All that is against the background of this devolved region, on foot of these arrangements, having the highest public borrowings per head of population of any part of the United Kingdom. This small region with £1·8 billion of public borrowings. Whether Sinn Féin likes it or not, that will have to be paid back. In listening to Sinn Féin, of course, there is nothing new in that — it has always had a sponging mentality. You think that nothing ever has to be paid for in life or in government, that you just keep increasing the size of the begging bowl and that the rest of the world owes you a living and must keep filling it to your demands. That is exactly the mentality that we see and hear from the second biggest party of this Government and what manifests itself in the Budget in order to make it an agreed Budget. One really despairs about the economic direction of this Government other than to aid the bankrupting of Northern Ireland, which, of course, suits Sinn Féin fine. That, of course, fits entirely with their political philosophy.
Of course, it is no surprise that tucked within the Budget are the now standard levels of squander on "North/Southery", propping up institutions for the sake of calling them institutions that, frankly, bring nothing that a Skype phone call or a phone call could not bring in terms of North/South cooperation — oh no. For the sake of it, because someone else is paying, we need to have all these North/South institutions, not because they deliver anything for anyone but because they are essential to the political infrastructure. So, let us pour millions upon millions of pounds, year on year, into them. Then, when we get to the point of needing to top up welfare and everything else, let us just cut the money for our schools, our vital services and our hospitals because the priorities that must be met from Sinn Féin are those that are, to them, far more important than making government work.
One could go on about the squander. I look at the expenditure that the Budget will allow to continue. I look at the squander in the neighbourhood renewal programme, the idea of which is good and sound if it were restricted to obtaining economic advancement for deprived areas. However, who would believe that, under neighbourhood renewal, and under a DUP Minister since 2011, someone somewhere thought it proper to spend £2·1 million on Irish language groups — not a penny, I might say, on Ulster-Scots groups. Someone thought it appropriate to give £250,000 in funding to LGBT communities under neighbourhood renewal; £170,000 to an LGBT group in Strabane and Lifford, which I think is outside the jurisdiction; and £2·6 million of neighbourhood renewal money to the GAA. It is that squander and that abuse of programmes that could produce good results that bring all these matters into disrepute.
I look at the budget of OFMDFM. The biggest growth industry in OFMDFM since 2007 has been its coterie of equality staff. We now have 124 OFMDFM staff — of course, OFMDFM has almost twice the staff of the Prime Minister — working in a unit called "equality and strategy". They obviously do not do irony when it comes to strategy. That is a phenomenal growth. Yet a real equality issue, like the long-standing claim for equal pay for civil servants who worked in the PSNI etc on secondment, is still, even yet, unresolved.
The Finance Minister apparently prepared a paper. He tried to table it, something like last June, and it still has not even got onto the Executive table. We can find time and money to squander on the matters that I have referred to, yet we cannot find time, because Sinn Féin has been blocking it, I suspect, to address a real, a genuine equality issue such as that of equal pay. I do not think that there is a penny in the Budget to resolve that issue. It is shameful that, after all this time and after all those people have been short-changed on the equal pay issue, there is not a penny in the Budget to redress that and give them relief. I find that quite, quite shocking, but it speaks to the perverse priorities that seem to dominate this Budget.
If the opportunity provides itself, I will happily vote against the Budget, not because — taking care of the attempt to pervert, sometimes, what is said — I do not want to see money spent on our hospitals, in schools, for victims or on vital services, but because I want to cry out against the squander in this House on totally unmeritorious matters. This is an occasion to do that. I am glad that the Finance Minister has brought the Bill to the House. Reading some correspondence from him at the weekend, you would have thought that we had had the Budget debate. What we had three weeks ago was a mere motion recommending the Budget. It takes this Bill, and it took last week's Vote on Account, to actually implement anything of a budgetary nature, making this the proper forum for these discussions.
Then, I think of business in this community. I look at how some businesses in my constituency have been treated. I think particularly of the burden of rates that has been placed on businesses. Let me, for a moment, tell the House of a real-life example of a business in Ballymoney Street in Ballymena.
In 2009, a lady of initiative sets up a business on that street. The Minister's rating department writes to her to say that her rates shall be £3,000 a year. She budgets, sets out her financial plans on that basis and is making out accordingly. Two years later, the same rating department from the same Department writes to that lady to say, "We made a mistake; your rates are £10,000 a year and you owe us the difference for the last three years". This is a lady who, in good faith and through no fault of her own, balanced her books on the premise of what the Department told her: that her rates would be £3,000 a year. Then, in that most high-handed of ways that only departmental officials sometimes can carry off, they simply tell her, as if it is nothing to do with them, "We made the mistake; it is £10,000 a year and you owe us an extra £7,000 for the three years". That lady has been faithfully paying the £10,000 a year ever since. However, she naturally has said to the Department, and, through me, to the Minister, "Now, come on: it is so unfair that you make the mistake, then apply that as an albatross around my neck and expect my business to survive because of your mistake".
What does the Department do? They throw back in her face the money that she is prepared to pay to try to pay down the debt. She offers to pay them £50 a month, because her budget is so tight. The Department says, "Not at all. We need it all". The best they will do is, I think, £260 a month. That is what they need. It is undoable for her. What does the same Department, headed up by the Minister who tells us so many times at the Dispatch Box that he is interested in helping business, do? It issues bankruptcy proceedings against the lady to try to put her out of business. Instead of recognising their fault and trying to stretch to make an arrangement that can keep her in business, their cruel action is to try to bankrupt her.
No later than today, I have a letter back from the Finance Minister in which he stands over how they have treated that woman. Shame on this Department, which has squandered so much money elsewhere; it cannot even find an accommodation for someone who is struggling and who, through no fault of her own, has been put in this position. All she gets is the bureaucratic slap down from the Minister and the Department. That is shameful. I thought that the Department was capable of better than that. I also thought that it might have taken them less than three months to reply, but there you are.
It seems to me that we have a Budget that faces in so many different directions that it does not know where it is going. It is motivated only by doing whatever it takes to keep things together. As for delivery, who knows? Who knows where it is going? Who cares? That seems to be the attitude. Thank you.
Mr Irwin (The Chairperson of the Committee for Agriculture and Rural Development): The Agriculture and Rural Development Committee, like other Committees, takes regular briefs on financial and budgetary issues from the Department as part of its role to scrutinise the Department. I have, on behalf of my Committee, expressed the Committee views on the Budget for 2015 to 2016 a number of times in the last few weeks. So, Members will not be surprised that there is very little in this speech that is new.
As always, the Committee position is that, as far as it is concerned, one of the main remits of DARD is to pay grants to farmers. By that I mean the payment of EU grants, particularly what used to be called the single farm payment, but which, since 2015, is the basic payment. In the Committee, we count that as the front line, and we want to make sure that that is protected.
We also count as front line the provision of other services to the wider rural community. That covers such areas as the rural development programme, the rural White Paper and the tackling rural poverty and social inclusion (TRPSI) framework.
I just mentioned the TRPSI framework. As some of you will know, it is a Programme for Government target. As a Committee, we recently undertook some in-depth scrutiny of the framework and have just produced a paper on it, which we hope to have debated in the Assembly in the near future. We have a number of recommendations for any successor framework, including one that relates to budget.
The Minister of Agriculture and Rural Development has provided the framework with a budget for the 2015-16 year that is more heavily weighted to capital than previous. As a Committee, we had no major issue with that, but we did have some minor concerns. We feel that the Department must acknowledge that the funding for the TRPSI framework has been largely resource-based and that, without doubt, engagement with the stakeholders will be required to ensure that suitable capital projects can be identified and that such projects can be delivered within the framework.
As with all aspects of government, the DARD budget may be challenging in the next few years. Tomorrow, we will be hearing from Agri-Food Strategy Board (AFBI), an arm's length body of DARD. From what I have seen, its budget will be very difficult. The Committee will take oral evidence from AFBI tomorrow. I have had a quick glance through the papers that it has provided, and they do not make happy reading. AFBI has a key role to play in the industry, and its research is essential in growing our farming and agrifood industries. AFBI also has an important role on disease control for both plants and animals and is heavily involved with both bovine TB and bovine viral diarrhoea (BVD). However, like every publicly funded body, it is going to have to cut its cloth to match the new reality of decreasing budgets. The role of the ARD Committee will be to ensure that the AFBI budget and work programme is aligned to that of DARD and to the farming and industry priorities. DARD has already told us that it needs to shed around 300 jobs to meet its payroll costs, and AFBI is looking to shed slightly under that figure. Between the two, that is a massive cut in jobs.
When the Committee took evidence from the Minister and her officials in January, she outlined that savings of £29·9 million are required in one financial year. She also outlined her five key priorities. Those priorities are the successful implementation of CAP reform; the implementation of the Going for Growth action plan; the headquarters relocation programme; continued support for the TRPSI programme; and continued investment in flood alleviation work. In this coming year, the Committee will keep a close eye on those five priorities and make sure that the budget is aligned to those priorities.
We will continue to watch and make sure that services are delivered as efficiently and as cost-effectively as possible. For example, I outlined previously concerns that the Committee had around the Northern Ireland food animal information system (NIFAIS) programme. This is a large-scale IT project and its costs, both resource and capital, are substantial. We have had a closed-session briefing on that and had a very frank and open discussion with DARD officials. We also commissioned some research, which helped us to compare and contrast it with similar projects in other countries, including New Zealand and Canada. I cannot speak for the rest of the Committee members, but I feel a little more assured that, despite the high risk factors and the consequence to our industry if it all goes wrong, DARD is working hard to make NIFAIS a success.
As we debate the Budget Bill today, I will finish by saying that we know that hard times are coming, but the Committee will continue to play its part to ensure that the cuts and savings are made in line with priority services and that the front line is protected as much as possible.
Mr Kinahan: I am pleased to be able to speak on the Budget. I am going to speak on education and enterprise, as those are the two fields that I am spokesman for. It is sad though. We really feel that, so often, we do not follow the consensus that was set up in the Belfast/Good Friday Agreement, and so many of the comments that have been made today about the Budget are because one Minister is doing his own thing compared to another. It is sad that we did not make all the cuts when we should have made them four years ago. We should not be going through the agony that we are going through at the moment; it should have been slow pain over four years instead of all in one go.
I will start with education. I very much welcome the £150 million that we moved to the Departments of Health and Education, especially the large sum that went to Education. I congratulate the whole of the education establishment for its strong lobbying, as it battled with its appalling Christmas present. It was told just before Christmas that £78·7 million was going to be taken out of the aggregate schools budget, along with numerous other cuts in early years, earmarked funds, some major capital, some minor capital, and — what really matters to must schools — the maintenance budget, which, I think, was being cut by £13 million. That is what they had to live with through Christmas. Still, today, they have to live with uncertainty, so I hope that the Minister will push his colleagues to try to ensure that that uncertainty stops.
I wonder, when we went through all this before Christmas, before that £150 million came, where was it actually found. Was it really part of the Stormont House Agreement, or was it sitting there? Why did we not give those in health and education some idea of priority — that health and education were the priorities — so that, after Christmas, they had some hope?
Anyway, I must not be too grumbly and should not speak ill. It was good to see that money coming through, but we have not seen any more money since then. There has been one press release, which confirmed that £18 million was going to the aggregate schools budget on 19 January, £2·5 million was going into preschool education, and £2 million was going into education and library board youth schemes. That is all that we have heard. All the schools and everyone in education are still sitting there wondering what is going on. Surely, Minister, there has to be a better way to do this to make sure that people are told what is happening.
The Irish National Teachers' Organisation said last week that 500 jobs could still be lost under the revised budget, so we are still sitting there. Are those 500 jobs to do with the jobs that will be cut back in the Civil Service, or are they 500 jobs that they are still concerned about in schools? We must have clarity. It is unfair on everybody to let this run on and on. There is a complete lack of certainty, and there is no transparency or consistency in how we do things. Schools do not know what is happening in the next few years. They have to work on three-year budgets, yet no one else seems to look more than six months to a year ahead. We need to start to deliver more accurate information to schools.
It is interesting that the Treasury tells us that Northern Ireland, per head of population, receives more for education than any other region in the UK. The following figures are for 2012-13: England £8,529 per head; Wales £9,709 per head; Scotland £10,512 per head; and Northern Ireland £10,876 per head. That is a huge figure and is 24% above the UK average. Where does all that money go? Where is the Treasury getting its figures from? Schools are certainly not seeing it. I hope that, with the new Education Authority, less money will be siphoned off to bureaucracy and more will go to pupils and better education.
One school rang me last week, wondering where its classroom assistant was. They did not know whether to appoint somebody or not. Another school has to change one of its classrooms into a dining room every day, and, even though that is done very swiftly, the school loses teaching time. We need to get so much right in our schools, so I ask the Minister to push hard to get proper budget details down to the schools.
We all know that there is £500 million to help with shared education, but that is only capital. A shared education Bill is coming, yet we are cutting all the other areas that will allow us to promote the sharing of education. Are we really thinking things through properly? At the same time, area planning continues. We are reviewing transport policies and coming up with many more initiatives. We must have a long-term strategy. Will the Minister use his influence, through budgets and other things, to get a joined-up education plan for the future so that people know what is happening?
I am also concerned that, if we are to go ahead with redundancies — voluntary redundancies first — we will lose all the highly skilled and most experienced people in one go. If they are like me and have learned from mistakes in their careers, they learn a great deal. If we lose all those experienced people, we will go through the same mistakes again and again.
I move on to the economy and DETI. I tried to find out whether we could look at the figures being spent on Invest NI and other matters in more detail, but we lost the argument in Committee. Most people said that we need to spend more because of being legally contracted, and it is what brings jobs in. However, you should not give up. We should still look at all the figures all the time to make sure that moneys are being spent properly and efficiently.
We wait for corporation tax to come in. I would love to know whether all the companies to which we have given big sums of money to come here in the last few years knew that corporation tax was coming, or whether there may be more flexibility in the future with corporation tax. If those companies have been given a nice chunk of money to come here, and suddenly they are being given a second whammy with corporation tax, have we budgeted for that, and will less money be given to them?
Also of concern in tourism is that we do not get our fair share from what is happening with the Irish. That is not because we do not get our fair share from the moneys that go to the tourism body but because the Irish do a whole mass of other things — they bring in lower air passenger duty and look at proper railway access to their airport — that have a knock-on effect on our tourism, and we always pay the penalty.
Our tourist figures today show no great increase in the numbers of people staying in Northern Ireland or coming from Great Britain. Yet we have the terrific success of the Titanic centre, and we have had golf and many other things happening, so why are we not getting many more people coming here? I think that it is because we do not yet have a tourism strategy on the ground that works for all of the smaller tourism events. I look at the wonderful Antrim Castle Gardens or at what we could do with Lough Neagh, and I think of the fishermen, anglers, shooters and all the other people who come here. We need a budgeted tourism strategy that feeds all the way down to the people on the ground. We must not have only big events and rely on the trickle-down effect. We have this great little country, so let us make sure that it works, and let us make sure that everything that we do in this Budget helps not just our schools but our whole economy.
Mr B McCrea: As I rise in this place, it is like death warmed up. It has gone to sleep. The energy has dissipated, and there is paralysis. People —
A Member: Is that self-analysis?
Mr B McCrea: I am just trying to tone myself down to get to the same level, Mr Deputy Speaker. I commend you, and I will commend the Minister, because you have had to sit and listen to every single word in the debate. There are a few things that I want to say, and, at 5.00 pm, it probably does not matter because nobody will be listening.
Mr B McCrea: It will not be on the news, as Mr McCrea rightly points out. The press will have gone home or to the coffee shop. Nobody will care, yet there are really important things that people want to say.
I will make a few general points to the representatives of Sinn Féin. I absolutely acknowledge your mandate. You have every right to say what you want to say, but, having listened to you, I have to tell you this: what I, as someone considered to be different, hear when you make a speech is that you bring up arguments at one end of the spectrum and then, at the very last minute, say that you support the Budget. I think that Michaela Boyle was saying, "We can do it. Yes, we can". It was like Bob the Builder. Where is this sense of optimism coming from? Where is the sense of economic and financial reality about where we are as 1·8 million people on the edge of western Europe? We need to trade and be part of other places. As someone who is happy to engage, I think that we need to have a proper Budget debate.
I will talk about DCAL now. I am on the Committee for Culture, Arts and Leisure, which is, I think, the smallest Committee. I think that I was put on that Committee because people thought that that was where I could do least damage. Let us just see what I can do on this. I believe that DCAL needs a champion. We need people to argue for culture, arts and leisure. It is not the Department for fun. It is not some add-on that we have because other people have it somewhere else.
I listened to Mr Kinahan's finishing words on tourism. We will have tourism, but the Budget that we have here will cut the Ulster Museum, the Folk and Transport Museum and all sorts of things that we could do in tourism. We then say that we will give more money to DETI because it might do something useful on this. I am sure that the Minister would like something to attend to in this speech, so I refer him to the Budget debate on 27 January:
"DCAL is facing an 8·3% resource DEL reduction. It has offered a degree of protection in that context, with the arts having only a 7·1% reduction." — [Official Report, Vol 101, No 4, p67, col 1].
The information that I have in front of me comes from the departmental notes, and, in the draft Budget, there was to be a 10% reduction, which then became 8·2%. The issue is that all the arm's-length bodies, including those for the arts, are now facing an 11·2% reduction, not 7·1%. When I look at the detail that is being brought forward, I see an increase, but the only two organisations that got the benefit of that increase were the Department and NI Screen. I have the documents here, and I am reliably informed that nobody else has such a comprehensive amount of information. Apparently, this is what the Civil Service does to you. When you ask questions, it says, "Here, have a big file. Read it. You will not read to the bottom of it". Well, I did read to the bottom of it, and I see that the Minister of Culture, Arts and Leisure's entire focus apparently is on NI Screen. We have magically secured an increase from £1 million to £1·87 million. I am not against NI Screen. I think that it is a fantastic organisation, but I wonder why we have not tried to deal with some of the other issues. I will see whether I can get some detail here. When I listened to the Chair of the Committee, Nelson McCausland, go through the top-level view and heard him say that we have seen this reduction in this Department, and this amount of percentage decline, it all became a blur, but when you drill down a little bit further, you get to see the things that we are passing.
The point that I made to the Minister in previous discussions is that poor old DCAL gets only £100 million, yet we are taking £10 million off it. It is a drop in the ocean, but wait until you see the effect that that will have. The Arts Council will save £120,000 by reducing salaries, by not replacing leavers or agency staff, by not recruiting students and by offering voluntary redundancy. That is to find £120,000. It will save £104,000 in administration. The impact of that will be a lack of regional spread, instead focusing only on Belfast and Derry. Therefore, I ask those people who argue for rural proofing and rural inclusion and who talk all the time in the Culture, Arts and Leisure Committee about rural issues, where is your defence of trying to make sure that culture, arts and leisure are spread throughout our rural areas?
Where do the real cuts come from? Where are the real cuts in the Arts Council, which we were supposed to be supporting? A total of £1·154 million in direct grants will be cut, and some organisations are likely to cease operating. I know that we did not get the 15% cut — we got only 11·2% — but the previous survey said that we will lose over 500 people from our arts centres.
We then move on to some smaller things that people used to say were quite important to tourism, science and outreach here. The Armagh Observatory and the Armagh Planetarium has to save £177,000. One of the few things that it can do is increase ticket prices by 10%, but then you will be into all sorts of issues around whether it is an internationally recognised scientific centre any longer. You will not get your children going to those places, yet it is part of the core curriculum.
I will look now to National Museums. This is what it means: we will reduce staff by 24 full-time positions with approximate salaries of £36,000 each. The voluntary reduction will cost £1·512 million. That is the cost this year. It is part of the £700 million that Mr Allister was talking about for a resource saving of only £400,000. We are going to strip away our assets in National Museums. We will see the complete closure of the folk gallery at the Ulster Folk and Transport Museum. We will see additional gallery closures in the Ulster Museum. There will be a reduction in outreach activity and special programmes for non-traditional people. We will see cuts in matters that are important to DETI, because National Museums produce three of the top tourist spots in Northern Ireland. We will see cuts that impact on DE and DEL, because it delivers key aspects of the curriculum. We will see cuts in areas that affect DSD, because National Museums NI works to deliver social-inclusion and community-based programmes. We will aim to save £859,000 in a reduction in pay bills through vacancy management. That means that we will leave posts open, we will not fill them and we will see a reduction in service.
What really disappoints me in all this is that the sums of money are so modest. The saving from the Ulster Museum is £43,000, yet you then go and close half of the folk museum. You get £16,000 for the Ulster Folk and Transport Museum and £15,000 for the Ulster American Folk Park in Omagh, which will actually see it cut for four months of the year. All of that is supported by a complete and utter stopping of traditional marketing amounting to £184,000. Now, when everybody else is talking about millions and billions of pounds, I am talking about really small sums of money, which, if we were so minded to protect our core issues, we would be able to find.
I do not know who is making the argument for this. The Minister said previously that I should make the argument to the Minister of Culture, Arts and Leisure. That does not seem to be working, so I am making it to him and this House. I will point out that, when he was talking about the issue in the Budget debate on 27 January, he berated the Ulster Unionist Party. At least now we can see that its opposition to the Budget — unlike other parties, which is to its credit — was that it hinged on less than one quarter of 1% of the total Budget. I am telling you that it was £60 million. All that I am looking for is £10 million, just to keep our arts programme alive and to do what is right for things that unite Northern Ireland.
You get to the issue of what else we will cut: Sport NI. I hear everybody here talking about how great it is about our sports champions and when our boxers do well at the Commonwealth Games. We sing their praises and do all that. What will we do? We will take £23,000 from Tollymore. There will be a reduction in seasonal staff, the number of courses and weekend services — the most popular time. We will take £75,000 out of performance coaching; the removal of the entire funding programme for performance coaching. How will we build our athletes of the future if we do not have coaches? We will take £57,000 out of club development performance. As for Activ8 for children in primary, post-primary and special education, for whom participation in sport is recommended by the Chief Medical Officer, we will take all that funding away as well. The loss will result in Sport NI having zero engagement with the education system. We know that this is not the right way to go forward.
We will also see the Sports Institute Northern Ireland seek a £180,000 reduction in high-performance service to athletes. We currently fund 200 athletes and 25 sports. Both will be reduced, meaning that we are unlikely to see medals at international level. We will also take £138,000 out of performance sport, which is likely to have an impact on participation at the Commonwealth Youth Games in Samoa in 2015. Is that really what we want? When you do surveys of what people are proud of, you find that they are proud of our people in Northern Ireland competing on an international stage. We will take away £44,000, £12,000 of which is from the Giro cycling legacy. We invested in the Giro and now we will not follow it up. We will take away £15,000 from Women in Sport and £16,000 from Disability Sports NI, which will threaten the future of the organisation, according to Disability Sports. I have made my point on where we are making really modest cuts that will have profound effects. The athlete investment programme will face a reduction of £63,000 in training for our expert athletes. A survey of public attitudes found that 90% of people thought that NI teams should have international representation and that 90% of people supported public funding for our young athletes. As a result of the Budget, we will have to stop all funding for the 55 development athletes whom we have identified.
I will finish on the issue of Disability Sports NI. DSNI directly impacts over 20,000 people with disabilities every year. The cuts in the Budget suggest that numbers of people who are part of the programme will be one third lower next year. People tell me that they have had a look at this from a section 75 point of view. This cannot be right; these people need our support. We have had debates in the Assembly, and there was complete agreement two years ago that we should support the work of DSNI. I ask: how do I make a case? How do I implore the Executive or whoever controls the purse strings in this arena? Culture, arts and leisure is not an add-on or bolt-on; it is the very basis of being Northern Irish; it is what makes us proud. It is about our culture and about celebrating what brings us together. I am not talking about high culture but about everything from marching bands to whatever. We ought to be investing in it, not cutting it.
I understand the financial reality that we face in that we have to make some attempt to reduce expenditure. We have to do that because of the area that we work in in the United Kingdom, but I am saying to you that the sums of money are so small for culture, arts and leisure in the monitoring rounds and suchlike. The Minister said on the record that he understands the benefit of legacy work, maintaining investment and so on. I would like us to look again. I am not in a position — you all know this — to bring forward amendments or to change anything. The only thing that I can do is tell you that these are the unintended consequences of the actions that we are taking. On behalf of people from rural places and all those people who make their living from, take enjoyment from or participate in culture, arts and leisure, I ask you to think again.
I will conclude my general remarks, because the Minister told me previously that it would be unreasonable of me to expect him to be in command of the detail of everything for fear of him being a megalomaniac. I accept and understand that point. However, when you drill down into the detail and look at what is there — I do not think that any other Departments have been able to give the information — you get to the stage where you think, "I would not do that; that is not joined-up". There are some areas that I really am interested in. I hope to finish on a positive, and the Minister may well be talking about this. I heard him talk at Question Time about how we might have an investment bank, how we might do more on energy and how we might use our financial transactions capital. All those are positive things, and I commend that, but we need a Budget that we all genuinely agree with. There is no point in people saying, "I disagree with all of this", and then saying, "I will vote for it".
Equally, there is no point in people voting against it on principle when they have no other ideas. You will be pleased to hear that, at twenty minutes past five, when the media has yet to pay any attention and nobody is listening, I have, at least, said some things on the record, which, in the cold light of day when I am not associated with them, people may well take on board and say, "Do you know what? There is something that we should do. We need to find a way forward, and that needs consensus." That is the only way forward in this place. We cannot keep taking potshots at each other: we have to find a way to agree, and when we agree, we should be arguing for it, not making excuses.
Mr Byrne: Arising out of the Stormont House proposals, there is a strong emphasis on a voluntary exit scheme (VES) proposal, as has been outlined by many other speakers. The voluntary exit scheme is hailed by some parties as a means of tackling over-reliance on the public sector, but how can it be delivered? There needs to be a skills needs analysis for each Department to sustain viable public services at the delivery end. Otherwise there will be a lot of disappointed people. We are told that the target in the public services should be 20,000 posts — around 10% of the whole sector. Managing that through a voluntary process is a tall order.
In terms of DARD, 300 posts are to be targeted — around 10% of the Department. Again, how will the professional and technical needs be maintained to a sufficient level to provide the quality of service that people expect? It is therefore crucial to have a planned approach to implementation of the VES. That is the challenge for each Department and, in particular, for the Minister who will oversee the process.
The phrase "invest to save", or "borrow to save", is the theme of these public-sector employment cuts. How can this major restructuring project be managed successfully so that rising unemployment is not the headline outcome? It could be an economic disaster for the local economy, leading to a downward spiral in business confidence if there is no consequent improvement in the private sector as we cut the public sector.
Mr Deputy Speaker, where is the evidence of an economic plan for the North in this Budget? The reality is that there is none. That is the biggest gap in the entire Programme for Government, and it is still lacking in the current Budget proposals. It is now more important than ever to have one, if we are going to realise 20,000 job cuts in the public sector.
Northern Ireland has never had a focused, targeted economic plan or policy for the entire region. Regional imbalance has been the order of the day, because of the custom and practice pursued by the public bodies charged with shaping economic development. That is the historical legacy. The infrastructure deficit in the west and border areas highlights the regional imbalance in FDI trends and economic development in general across the North.
Does the Budget provide a focus and a road map to a more successful local economy, or is it primarily about implementing austerity cuts? That is the outstanding question, and I remain to be convinced.
Mr McCallister: I am reminded at the outset of the old adage about a Government that is in office, but not in power. I think that best sums up this Budget and probably this process. That, to be fair, is not all the Minister's fault, because he is struggling to get Executive colleagues together.
I will make some points about the Budget and the policy direction. We are in a budgetary period without a Programme for Government and any resulting targets or objectives. Looking at the last Programme for Government and how meaningful some of it appeared to be, you might say that it is not a disaster or a bad thing because everybody ignored the last one anyway, but you also have to look at the effect on a Northern Ireland Executive that is at odds with itself. There is a 3:2 split on this Budget. Thankfully, the two are the two bigger parties, and they have the numbers over the three smaller parties who are against it. There is a 4:1 split over Minister Farry's issue on St Mary's and Stranmillis. I am not quite sure about Belfast port, but clearly the Finance Minister is at odds with the Minister with responsibility for the ports. We had a broad 3:2 split on welfare reform, with the two being mainly the SDLP and the Ulster Unionists.
When it comes to Transforming Your Care and the Donaldson report, I am not quite sure where we are on any of that, whether we are going to deliver full steam ahead on Transforming Your Care or whether some parties are now opposed to that. There is probably broadly a 3:2 split on the voluntary exit scheme; I am not quite sure where some of the parties are on that. That has always been the difficulty that this Minister has faced, because he does not have a united Executive.
Let us look at some of the policies, such as the voluntary exit scheme. It was agreed at Stormont Castle or Stormont House — or maybe even both — and then some people suddenly realised that this was not where they wanted to go. My biggest concern over the scheme, and welfare reform, is the broad acknowledgment that this Executive are only doing these reforms under pressure from Westminster. Where is the vision and strategic direction of this Executive? Where are they going and where are they leading Northern Ireland to? The broad parts of the policies do not add up to make a complete and coherent Executive with a direction. The key aspects of economic policy and welfare reform do not add up.
Let us look at where we are on other strategic parts of public-sector reform, such as TYC, local government reform, education, DARD headquarters and reducing the number of Departments. As the Minister is aware, I have asked him to publish a strategy on the voluntary exit scheme linked with a strategic plan for public-sector reform. I have yet to receive an answer but I am sure he will reply in his winding-up speech.
We have proceeded with welfare reform only because of pressure from Westminster. The resultant cost of that is £565 million over six years. How is that going to be paid for? Again, we have set the bar at defending budgets rather than looking at outcomes. We have not been told how this is going to be paid for or where the money is coming from. The Minister must know that this is not a zero-sum equation.
The danger for him is that this money will have to come from education, health, social investment and employment and learning. We may find that with an incoherent Executive policy on welfare and the economy we are robbing the very services that might help people to get out of the trap of welfare and move into the world of work; those training and employment opportunities that this Executive will have to cut. In attempting to address health inequalities we will struggle to meet the demand. That is where this Executive, in this Budget, fail so dramatically because there is no joined-up purpose to this Administration.
Remarkably, corporation tax is the one policy on which there is a 5:0 agreement around the Executive table. All the studies that we have looked at on corporation tax suggest that to get the gain from it we have to invest in skills and training, yet DEL is facing a 6·4% cut next year. Where is the joined-up approach of the Government? Where are we going to create these jobs?
During the welfare reform debate last week, I asked whether Sinn Féin had now forgotten about social mobility for some of its constituents. I also asked whether it had moved into the area of trickle-down economics because a cut in corporation tax has a long way to trickle down to some of its constituents. That is the problem that this Budget is delivering and this Minister faces.
We hear much about strategic vision. Mr Allister made the point that OFMDFM did not quite see the irony in having an equality and strategy unit. That is because there is no sense of strategic direction. Take even one Minister making a funding decision about Stranmillis and St Mary's, and then all the Executive closing down. What is worse, that Minister is still in post. He is still there, clinging on to office, and that builds into the First Minister's line about the dysfunctionality of this place and this Executive. We cannot continue in that vein.
The problem is that key parts of this Executive's policies do not add up. The economic policy of the Executive is incoherent. The public-sector reform policy is incoherent. The social policy is incoherent. Our health policy is incoherent. Our fiscal policy, to borrow and pledge spending with no indication of where the cuts are going to come, is completely incoherent.
(Mr Deputy Speaker [Mr Beggs] in the Chair)
Can the Minister stand up when he replies here and claim that it has been a great achievement? He will claim that it has been a great achievement getting Executive agreement on this and that the public should be grateful to him for that. The only reason why he and his colleagues are getting away with this is because there is no credible alternative in this Assembly. There is no opposition, and that is why this Assembly so desperately needs an opposition and alternative view. Quite frankly, the people out there have long-since switched off from this debate and what this Assembly does.
Even Sinn Féin have taken their hollow rhetoric to breathtaking new levels. Northern Ireland and your constituencies, as well as my constituency, have been bankrolled by a very generous UK Exchequer and taxpayer. Let us look at this notion that Sinn Féin have been pushing about the Union being the price of austerity. I am sure that the Minister will give as accurate a figure as he can of what the subvention currently rests at. If it is in the region of £9·5 billion to £10 billion, that comes very close to the entire income tax take of the Republic of Ireland, so where do Sinn Féin think in the real world that that money would come from? If we were not part of the UK and getting a generous handout from the UK Exchequer, how do they think we would prop up our National Health Service, our schools or our roads infrastructure? Where do they think in la-la land that we would get that money? Where do they think the Finance Minister would get that money?
It is just incoherent nonsense to think that we join this all-Ireland republic and it will somehow be blissful and easy. Our friends and colleagues in the Republic of Ireland have had to take some real pain in the last seven to eight years — real pain that we have largely been shielded from. If you look at even public-sector reform and job losses between 2010-13, the UK average was a cut of 10%. Northern Ireland was 3·5%, so where do they think any of that would come from? I am not quite sure.
Add up some of the figures. Take £70 million per year on welfare reform. At some point, this Minister is going to move, and his colleague beside him will cut corporation tax at a cost of £325 million. That starts to rise to £400 million per year. At a time when the Minister has been warning us that we are in for a difficult period in this coming Budget and in the years to 2020, how do those two things add up?
This at a time when we are cutting our skills budget, topping up welfare payments and possibly trapping people in welfare and more. This at a time when we cannot make any decisions due to an inability to make decisions. When we listen to the likes of Mr Flanagan talk about the blank canvas for our economy, we find that he means a blank cheque, not a blank canvas. He wants a blank cheque that we can write and spend, which means that we never have to face the realities of what is out there in the real world. The realities are that, if you want to spend money at that level, you will have to raise it at some point. The Minister knows that I have been critical of the DUP line that says that we are a low-tax Assembly. We are virtually a no-tax Assembly. Five per cent to 6% of what the Minister will spend comes from his regional rate. So we are imposing no charge; everything else goes into a central pot and comes back to us in the form of the block grant and other separate payments.
The idea that this is a low-tax Assembly does not stand up to scrutiny. The idea that anyone would somehow want to pay more into such a dysfunctional body is also a worry. To the Alliance Party's credit, it talks about having the debate on revenue raising, putting tuition fees on the table, water charges and prescription charges. It is a debate that the Assembly needs to have. However, it needs to have it in the context of a reformed Assembly, which should be an Assembly that has a coherent Executive policy on welfare, the economy and on where it is going. People should know what it is doing. In that context, you might make those decisions.
Talking about revenue raising brings me to the Port of Belfast and the debate on that. We can look at that as one of the best examples of growth in our economy, which even John Simpson described as an "artery" for our economy. Minister Hamilton and Minister Kennedy were interviewed for 'The View' last Thursday night, and instead of having an Executive policy and strategy, they had diverging views of where the port is going. Why would we want to strip, I do not know, £800 million with no clue about the Executive's ability to deal with it, get on top of the issues, spend the money properly and invest wisely in Northern Ireland's future? At the minute, all we see is an ability to borrow. You might argue that we should be able to borrow if we are going to cut corporation tax, and you probably need to be able to borrow to match the volatility of that tax. You would also need to be able to save in better years. However, what are we borrowing mainly to do? We are not borrowing mainly to build roads and infrastructure, to extend our rail network, to build schools and health centres or to do whatever is needed for the Executive's strategic plan. We are borrowing to make people redundant.
The Minister knows my concerns on that about getting a policy, and he knows that we could end up with a brain drain. He also knows that we could end up doing something similar to the Patten reforms of the Police Service, when you could end up having to bring people back in who know how things work. We end up at Mr Allister's point about economic inactivity. This is where these parts of our economy and economic vision, with Sinn Féin's idea on welfare reform and the Minister's idea and drive on public-sector reform, do not add up to a coherent policy with associated costs. That is where we get into trouble, and we always end up defending the Budget line rather than looking at outcomes. We end up saving St Mary's and Stranmillis colleges, continuing to train too many teachers while not having enough IT graduates. Where is the joined-up economic policy in that?
The private and public sectors are mentioned. Even in my constituency, the centre in Tollymore is a great asset, but it is funded and continues to be funded by the public sector, offsetting private sector activity. That needs to be looked at when we consider how things should continue.
We look at various policies, such as what is in the Budget for delivering anything on the Maze site. Will it be a hub for agri-excellence? Would it not be better to think about relocating DARD headquarters there? Is the new community safety college too big and too difficult for us to deliver? Does some other venue need to be looked at? Meanwhile, we are spending millions looking at these ventures with no collective government policy.
We come back to the simple point that the Executive or the Assembly must reform the process or it will fail. Mr Allister quite rightly made the point that the Budget buys the Executive and the Assembly time through to May 2016. It has bought the full five-year term. However, the challenge after this Budget is that whoever is elected here in 2016 cannot come back to this unreformed Assembly and unreformed Executive and try to deliver a Programme for Government. It cannot be a Government with no real ideas other than what is being driven by a Westminster Government, whatever colour that happens to be, with no real incentive or motivation to do anything and with nothing more than the mutual veto hanging over it. We cannot continue to do business in that way as our people switch off from politics and the Assembly. We have looked at this too many times. There is no revenue raising, no way of changing it and no drive or ability to deliver, and we keep on doing it.
During one of the previous debates, when the Minister was in great quoting form, I quoted JFK to him:
"Efforts and courage are not enough without purpose and direction."
The challenge that I put to the Minister on that day was to show me where his purpose and direction and that of his Executive colleagues was. I am not seeing that purpose and direction. I would like to be able to see a coherent Executive that is joined up with purpose and direction and an ability to lead, govern and serve in the best interests of us all. Quite frankly, I do not see that in the Budget and that is very much to my regret.
Mr Hamilton: Mr Deputy Speaker, you are now the fourth Chair of the debate. Mr Basil McCrea congratulated the Deputy Speaker last in the Chair for his longevity. I have had to sit here through the entire debate while the Chair has had the luxury of changing.
I thank Members — [Interruption.]
Mr Hamilton: You have to endure it. It is payback time, Mr Allister.
I thank Members who contributed to the Second Stage of the Budget Bill. As I did in my opening remarks, I want to place on record my thanks to the Committee for Finance and Personnel for ensuring accelerated passage, which means, of course, that the tight legislative timetable can be adhered to at this critical point in the financial cycle.
Many issues have been covered in the debate. Some Members clearly heard my opening remarks about keeping their speech focused on the Budget Bill, but I think that only one Member did so. It is safe to say — it is probably the safest thing that I will say in the Chamber — that some Members may have strayed somewhat beyond the specifics of the Bill.
Mr Hamilton: I know that it shocks many Members to learn that. I appreciate the time that Members have given to the Bill and the debate, and I will do my very best to respond to as many of the issues raised as possible, although, given that we would all like to get home for some form of tea at some stage, I will not respond to every issue raised.
I start with the Chair of the Finance Committee, Mr McKay. I thank him for his work in that capacity and for ensuring that accelerated passage was secured. I think that he spoke on behalf of the Committee when he said that there was a "fundamental weakness" in our budgetary process and begged the question of whether it was "effective or efficient". Those are questions and points that I have considered many times. We at least had the benefit — it is a dubious benefit — of having a week between the debate on the Estimates and the debate on the Second Stage of the Budget Bill.
Usually, we do them back to back, on a Monday and a Tuesday. In retrospect, the benefit of doing it that way is that energy is sapped from Members on the Monday, and, consequently, the debate on the Tuesday is usually much shorter than this has been. It seems that the week that has passed has reinvigorated Members, so we have had to endure probably a longer debate than we might have had to in the past.
Mr Cree is not here. He is usually the first to raise this issue during these debates, and all Members who do so are absolutely right. I inherited a review of the financial process that had been taken forward by my predecessor. It was probably not initially perfect, but it was amended to reflect various concerns raised by the Minister for Regional Development and the Minister of Education. Changes were made to try to reflect their concerns.
Reflecting on the final points made by Mr McCallister, about the operation of the Executive, I can say that the paper before the Executive that is the longest outstanding is that on the review of the financial process, and the party that is holding it up is Sinn Féin. It is probably now too late for that review to go through as it is, and it may not even be required to go through as it is currently crafted. The reorganisation of Departments from 12 down to nine probably requires us to change the financial process somewhat anyway, because there will be fewer Departments. That therefore gives us another opportunity before this mandate is out. Mr McKay made the point about whether it is an effective or efficient process, so I hope that he takes time to reflect on the fact that it is his party that has refused to let the review of the financial process proceed.
The memorandum of understanding between the Committee and the Department would not, of course, have decreased the number of debates that we have had this year. I am content for work on it to resume, but, if the experience of the past year is indicative of anything, it is that the memorandum of understanding would not have worked in the circumstances that we have. I do not think that the memorandum was fit for purpose to have been engaged in this Budget process. I think that the process would have collapsed and fallen apart fairly quickly.
It is useful for us to be able to reflect on the Budget process this year, try to tweak or change the memorandum of understanding accordingly and then, hopefully, get the MOU in place for next year. However, for it to work, it obviously has to adhere to certain timetabling issues and, as the Chair and Committee members will appreciate, that is somewhat outside my control. If there is not political agreement to move forward on the Budget at all — never mind within certain preordained stages in time — the memorandum of understanding, even with the best will in the world, will not work in many regards.
Mr McKay mentioned the Smith commission and further fiscal devolution. There are a couple of points that I want to touch on there. One is to do with the Crown Estate. That is something that is contained in the Smith commission report as a recommendation for the Scottish Government, and one that they are keen to take forward. Although it would have little or nothing to do with my Department's policy responsibility, I see merit in exploring that proposed power further to see whether it is something that could reap a benefit for Northern Ireland into the future. I say that without having studied the report particularly and without looking at whether there are downsides to it. I tend to view Treasury offers of the devolution of things with that perspective. There are opportunities, and I can see some particularly for our renewables sector and our fishing sector that might be huge for Northern Ireland. It is a matter on which I very much have an open mind.
The Member has frequently raised the issue of APD. As the House knows, we already have devolved APD for direct long-haul flights. That is kept in place, albeit on a reduced service now. There is the United Airlines flight to Newark, and some other long-haul flights have been added, albeit most of them are to outward tourist destinations. The argument made by the Member, and by some others, although I think that the number is decreasing, is that we should extend the devolution of APD to short-haul flights. My stated position, and it remains the case, is that it is an issue for Her Majesty's Government to deal with, but I think that they should eradicate it. I think it is punitive to remoter parts of the United Kingdom, particularly to Northern Ireland, which shares a land border with the Irish Republic, where there is effectively no tax on flights in the same way that there is in Northern Ireland.
However, we should acknowledge the good work that has been done in attracting new routes to Northern Ireland, particularly recently, even without having no or a reduced rate of APD for short-haul flights. In the last months, for example, daily routes to Amsterdam by KLM have been announced; the Flybe flight to London City was introduced and then extended to two flights a day; and flights to Verona, Rome, Prague and now Barcelona have been announced. Some of those will be more for outward tourism, but some, such as those to Rome, Prague, Barcelona and Amsterdam, will bring tourists back in the other direction as well. Those are the sorts of routes that I want to see us increasingly getting. Get into bigger markets, cities and hub airports, yes, but I also want to see routes to where the resident population might want to come in this direction as well. My concern around APD for short-haul flights has always been that, if it was reduced, it would also be reduced for many of the holiday routes to the Mediterranean, the Canary Islands and elsewhere, which would take money out of Northern Ireland and not bring money back into Northern Ireland.
Mr McKay and Mr Flanagan raised the issue of rates, and did so on the back of the revaluation, which is starting to roll out. I make the point, as I have in a lot of correspondence to Members and in various press utterances, that the revaluation is not itself the rates bill. It is to do with the net annual value (NAV) and the valuation of the property. Councils are in the process of setting their rates and we have struck a low increase in the regional rate of 1·4%. It will be only when that is worked through that an increase in the valuation will be reflected in an increase in the rates bill as well.
Mr McKay is right: it is a long time since we have had a revaluation; 13 years, in fact. There were very valid reasons for postponing the previous revaluation, which was due to go ahead a couple of years ago. Such was the lack of movement within the market that it may have produced very distorted results, which would have been appealed by probably the vast majority of people and ended up in a significant increase in work for our valuation teams. I do think that the concerns expressed by some — a small number of people have expressed concerns about their valuation — is a reflection of the fact that their valuation has gone from here to there and they see that as one move, as opposed to perhaps happening over a 13- to 15-year period. It is important that we get back, very, very quickly, to regular five-year revaluations, almost come what may and despite the circumstances in the wider economy.
Again, I make the point that the whole purpose of a revaluation is not to increase the overall take on rates; it is to smooth that out and for a fairer distribution of the rating liability across businesses. There will be some winners; there will be some losers; and there will be some who remain the same. Glyn Roberts, chief executive of the Northern Ireland Independent Retail Trade Association, spoke for the majority of non-domestic ratepayers when he welcomed the outcome of the rates revaluation and said that it represented good news for independent retailers and town centres. That sentiment was shared by a Sinn Féin councillor Mr Jay McCauley, from the Strabane area, who was quoted back in November as saying that the revaluation — he said "re-evaluation", but I have polished it up for him — would:
"help to create a more level playing field in terms of the rates burden and give a long-overdue boost to many small struggling businesses and enable them to survive and possibly grow".
The small business rate relief scheme has been extended for a further year. That will offer some support, particularly for smaller businesses, which may see their rates go up as a result of the revaluation. There have been comments by some Sinn Féin Members over the last week or so, including by Mr McKay and Mr Flanagan, of the need to review the non-domestic rating system in Northern Ireland. I stood in the Chamber, having been not long in office, and made the point that, after we went through the range of changes that are happening to the rating system this year — RPA; rates convergence; the revaluation — and that had all settled down and bedded in, it would be an opportune moment for that, because it would be almost 10 years since the last review of the non-domestic rating system. That will be carried out very, very soon.
I enter into that with no preconceived conclusions, but I appreciate fully that it will be a challenging undertaking to find an alternative system that is better than the current one. I am not arguing that our rating system is in any way perfect, but, perhaps, one of its benefits is that it is at least understood. Far from perfect as it is, people at least understand how it works.
Mr McKay: Will the Minister elaborate on what he means by "very, very soon"?
Mr Hamilton: I mean that we will start it off in this calendar year. It will take some time to work it through. If there was a recommendation for change, it will take some time to work that through the system, whatever way it is done. I say this having no preconceived conclusions about what the results should be, but I have heard it suggested by colleagues of his that, perhaps, it should be based on audited accounts. Not every business in Northern Ireland meets the threshold to have audited accounts, so that does not work for every business. I have also heard it suggested by some of his party colleagues that we should use VAT returns as the basis upon which, somehow, we assess the taxation bill for local businesses. Not every business in Northern Ireland pays rates — sorry, VAT. Sometimes not every business pays rates either, but not every business pays VAT, so that is not a sound basis upon which to do it either.
One of the other downsides of moving away from rates is that, with rates, there is a lack of volatility in the take-in. That said, it has gone down. Since some businesses have not been able to pay in recent times, because of the crisis, it has, perhaps, not been as much as we might have expected, but you do not get the same volatility as there is in sales taxes or taxes that are based on income, profit or whatever it might be. Imperfect as the rates system is — I accept that — there are downsides. Therefore there would be losers in moving away from a system that is at least well understood.
I turn now to the Deputy Chair of the Committee, Dominic Bradley. I want to correct several inaccuracies made by Mr Bradley in his contribution. He said that the basis of any Budget should be an agreed Programme for Government. The SDLP said that there was no agreed Programme for Government. There is an agreed Programme for Government. The Budget Bill before us tidies up the end of the current financial year that we remain in. That is clearly covered by the agreed Programme for Government that, when it was designed, was due to conclude in the 2014-15 financial year. It will be extended by the Executive. The Executive have agreed to extend the Programme for Government, build upon many of the commitments that are there, and add to them with new commitments. That work will be done on the basis of new Budgets, because, obviously, the Budget has an impact on Departments' ability to meet targets or to stretch them further.
Mr Bradley also asked what the rationale was for a reduction in the rates support grant to local government. That, of course, is a question, not for me, but the SDLP's Minister, Mark Durkan. He should be asked why he took a decision to reduce the rates support grant. I believe that he played politics in doing so. He has full policy responsibility for the rates support grant; it is not my responsibility. I appreciate that the Minister, like many Ministers, has a budget cut to deal with, but it is up to him to prioritise his budget. It is significant, I believe, that, in November, he published draft rates supporting grant levels for local government but did not change one iota between draft and final budget. In my view, no serious effort was made by the Minister to do anything to offer additional support for local government. So, when Mr Bradley asks what the rationale for the reduction is, he would be better asking his colleague.
Mr Leslie Cree is not here. In a break with modern tradition, I do not think that he asked about a review of the financial process. He asked about a range of things around the £50 million for shared and integrated education and the money that was allocated in the Stormont House Agreement for the past. He will note, as will Members, that, in the Budget for next year, that is not specifically allocated to any Department at this stage, because decisions are required on the bodies that will deal with the past and on shared and integrated education. There needs to be agreement between ourselves and Her Majesty's Government about those projects as they move forward. As they are agreed, those projects will require the release of funding, and that will go into the Department of Education's budget as appropriate. He asked about the voluntary exit scheme and whether there was going to be any delay. There is no delay. I think that some of the comments I made during Question Time will have have leapfrogged his query. As I said at that time, it is opening on 2 March and is only one of several strategic personnel interventions that we plan to do.
With regard to his comments about the Port of Belfast, that is an issue that his own party colleague, the Minister for Regional Development, is responsible for. Whilst I am touching on the Port of Belfast, Mr McCallister referred to it in some of his final remarks. I am not sure what he thought the differences were in the views expressed by me and Minister Kennedy. I think that the real difference in views around the sale of the Port of Belfast is not so much between me and Danny Kennedy; I believe it is between Mr Kennedy and his party leader, Mr Nesbitt. In the 'Belfast Telegraph' on 17 December, Mr Nesbitt confirmed that the sale of the harbour had been proposed by his party during the Stormont House talks process. Yet, last week, on the aforementioned 'The View' on the BBC, Mr Kennedy said that he was "not inclined" to support the sale or privatisation of Belfast harbour. If there is a difference in opinion anywhere, it is less between me and Mr Kennedy and more between Mr Kennedy and his own party leader. However, as the Member will appreciate perhaps better than anyone, no difference there.
I have stoked those fires, as I did in the past. For what it is worth and to make my position clear, our Budget next year or in future years will not be predicated on the need to sell the port and get a receipt from its sale. There would be a large receipt to be had from the sale of the port, and that makes it attractive to examine, but as many commentators and I have made clear, whilst there would be a large receipt from the sale of the port, the port is an economic driver in Northern Ireland, and that is a factor that you would have to consider in moving towards any sale.
I do not think that it has to be just an issue between keeping the port in broad public hands and selling it. I think that there are other options short of a sale that we should also consider. I hope that the Minister, in the proposals that he has yet to bring to the Executive to create a panel to look at that, might want to consider that there are other option hybrids between those that might realise ongoing receipts for the Executive short of selling the port and putting it into private hands.
Mr Cree asked for an update on INTERREG funding. Our INTERREG programme was agreed by the European Commission as recently as Friday, and the fund has £282 million in it, which will be spent on areas including research and innovation, environmental protection, sustainable transport and health. It is hoped that by the spring or at least the early summer INTERREG IVa will be open to calls.
Trevor Lunn criticised the Budget and said that it did not deal with financial problems or the financial issues that the Executive are facing. I disagree, and you would expect me to do so. It is a balanced Budget. It was a requirement that we had a balanced long-term sustainable Budget or there would have been no proceeding with the legislation on corporation tax. That, and progress on welfare reform, was a condition. I appreciate that the Budget is not to everyone's satisfaction, but it is a balanced Budget and it is getting us back on to a longer-term and more sustainable footing, and that is being endorsed by the actions of Her Majesty's Government in taking forward corporation tax legislation. It, at least, begins to deal with some of our longer-term financial problems by focusing on workforce restructuring and enabling that to happen, and on reorganising our Departments and reforming our public sector, particularly through the likes of the Organisation for Economic Co-operation and Development's (OECD's) review.
Mr Lunn asked what the Budget was doing in respect of preparing for corporation tax. There is ongoing preparation in terms of investment in skills, infrastructure and economic development. Of course, there is no need to address the cost issue in next year's Budget. There are still a number of what could be described as uncertainties around corporation tax and its cost.
Before some people jump down my throat and say, "Well, if there are uncertainties, that is why you shouldn't proceed with the devolution of corporation tax," I want to point out that these are uncertainties that will only become more certain in the next number of years. One is what the next comprehensive spending review means for Northern Ireland. Like many of us, I am observing the utterances coming from the Conservative Party and the Labour Party about what they propose to do with various areas of public spending. Each time, they try to outdo one another, one by protecting health in cash terms, and then the other wants to protect it in real terms. The next day they want to protect education spending in cash terms, and the next day, another party outdoes them by wanting to protect it in real terms.
The net effect of all of that for Northern Ireland is actually quite positive. Sixty-five per cent of our Budget is spent on health and education, and we get almost full comparability. That means that, if that is what happens after the next election, whoever is in Downing Street, it is good for Northern Ireland. It might put our public spending in a somewhat better position than perhaps we might have feared. I am not saying it is going to be easy, by any means. There will be challenges ahead, but if those promises are fulfilled after the election, it could have beneficial outcomes for Northern Ireland. There are still areas of negotiation, particularly around the ongoing adjustment formula for corporation tax.
Another uncertainty, I suppose, if you want to use that word, is the savings that we will realise through the voluntary exit scheme. Whilst we do not have to deal with the cost issue right now, we have some time to prepare, and there will be some things that I believe will work out beneficially for Northern Ireland.
Mr Lunn criticised allocations to the Health Department; I point out again that health and education account for 65% of our total Budget. Health alone is 46% of our Budget. As an Executive, we have sought to increase, and agreed to increase, our budget for health by £204 million, which is over 3% of an increase. I agree with Mr Lunn that the Health Department still requires reform, but the points made by Mr Weir are worth bearing in mind. The pressures that our health service is facing — and undoubtedly it is facing pressures — are not just pressures that are being faced in Northern Ireland. These are pressures that are happening elsewhere in the United Kingdom, that are being faced in the Republic of Ireland and, arguably, that every Western Government is facing in terms of difficulties in funding, need and demand in health.
Not too many people spoke about health spending today, but while Mr Lunn talked about the need for reform — and he is absolutely right that there is a need for reform in the health service — whenever the Minister comes forward with any number of different reforms, those who call upon him to introduce reforms are very rarely standing behind him, backing his reforms. They are usually standing in front of him with a placard, protesting against the reforms. I can probably include several party colleagues in that. In asking the Minister to bring forward reforms, we all have a responsibility to try to support him and those in the NHS more as they do try to reform in what is a very difficult set of circumstances.
I turn to Michaela Boyle's contribution. I am not picking on her, but the comments that she made were pretty typical of comments made from Sinn Féin Benches throughout the debate. It is not a personal attack on her. Sorry, I have prefaced it by saying "attack"; I should not say that. It is not a personal critique of her comments. It is a critique of Sinn Féin comments more broadly.
She talked about an over-estimation of the fiscal deficit — a point that was picked up by several Members in the corner, principally Mr McCrea and Mr McCallister. This is a fundamental issue: what is the subvention, the fiscal gap, or the fiscal deficit? Sinn Féin's stated position is that it does not believe the figures that are put out there showing that there is a subvention. The most recent figure in the net fiscal balance report is that it is £9·5 billion. If I was to not believe those figures but believe the Sinn Féin position that that figure is wrong, it begs the question of what Sinn Féin believes the fiscal deficit is. Does it believe that there is a fiscal deficit? I am not even sure whether it believes that there is a fiscal deficit. If it does not believe that, there is something seriously wrong with the position that it is espousing.
Accepting, as most of us do, that there is a fiscal deficit, some of us believe the figures in the net fiscal balance report. Perhaps some others do not, but most people accept and agree that there is a fiscal deficit. It is important that we accept that there is a gap, because it goes to the heart of the other points that Ms Boyle and others on the Sinn Féin Benches were making.
Sinn Féin Members got up one after another and talked about the need for more and more fiscal devolution and for it to happen almost immediately. As long as the corporation tax debate has gone on, we have tried to be very careful to say that one fiscal devolution — in this case corporation tax, which is fairly significant — is not in itself a panacea to all our economic ills and is not the silver bullet that will solve our economy, but the Sinn Féin position seems to be that outright, almost immediate fiscal devolution is the panacea for all our economic ills. I am not, and nor is my party, against further fiscal devolution, and we pursued the devolution of corporation tax aggressively.
Some Members wanted us to move on to plan B. I recall that the deputy First Minister, who is from the Member's party, came out of a meeting in Downing Street stating his belief that the devolution of corporation tax would never happen. Some of us got stuck in and kept at it, and we have now secured the power to lower the rate of corporation tax. You cannot question my commitment or my party colleagues' commitment to further fiscal devolution as long as it has a defined economic and social benefit for Northern Ireland. I do not think that anybody — well, there are some — doubts the case with corporation tax. It is not a point of principle that we are against further fiscal devolution because we are part of the unitary state of the United Kingdom. We have devolved APD as well as pursuing corporation tax.
Mr McKay: The Minister mentioned the deficit. It has been quite clear from the Finance Committee's work that a number of witnesses from universities and other institutions are saying that we do not have enough financial information to know that these figures are accurate. You talk about the deficit being £9·6 billion, and different figures are bandied about. We cannot be assured that the figures are accurate, because we do not have the information in front of us. Other countries do things differently and have accurate information. There is no doubt that there is a deficit, but, unless you have the economic levers to generate more wealth for the society that we live in and set policy in our primary interest, you will not overturn that deficit. You are in a vicious cycle of a deficit that will not be overturned.
Mr Hamilton: The Member's contribution shows some progress in that he accepts that there is a deficit. That deficit is not £1, £100, £1,000 or £1 million; we are talking about billions of pounds. If Mr McCrea's contribution was not going to make the media, I can be absolutely certain that my contribution on the 'Net Fiscal Balance Report' will not make the media. The methodology applied to produce that report is similar to that used by the Scottish Government for their equivalent report. It has ONS status, and ours does not. If it is based largely on the same methodology, it is capable of getting ONS status, should we wish to pursue it.
Mr B McCrea: I wonder whether we should take the argument from a different position. Maybe not now but at some stage, we have to look at the amount of revenue that Her Majesty's Government raise from the City of London and the contribution that it makes. There is also the polarisation of tax-paying corporations' headquarters in London. If you take it from that basis, it is impossible that we, as a peripheral region, can be self-sustaining. Frankly, this is what really makes me depressed when I hear arguments that are not based on sound economic fact. I want some way to be able to challenge the issue and get it sorted. Once the facts are established, you can decide your policy.
Mr Hamilton: The Member is right about the huge benefit of the City of London to the UK as a whole, even with all its problems over the last number of years. It highlights the problem for a state such as ours, particularly given that Northern Ireland is peripheral to London and the south-east, which are huge drivers for the economy. The same is true, of course, in the Irish Republic, in that Dublin is a huge city that dominates the Irish economy. It offers a subvention through its wealth to places like Kerry, Donegal, the west of Ireland and many parts of the midlands.
So, that is not unusual. Clearly, you would not want that to be the case if you could wave a magic wand, but it is a reality of many states. The same is true in France and Germany and anywhere around the world that you want to look at.
I want to reiterate the point that my position is not one of opposition to further fiscal devolution. By backing consistently the devolution of corporation tax and now securing that power, my party and I have shown that, in the right sets of circumstances, we are in favour of the further devolution of fiscal powers to this place. That gives us more of the economic power or levers that Members of Sinn Féin were talking about, and it will have a beneficial impact on our economy.
Full fiscal devolution, which, I think, is what is being advocated by Sinn Féin, and very quickly, runs the risk of huge volatility in tax receipts and, therefore, less public spending. Somebody may bounce up and say, "That is the case with corporation tax as well". I think that there is a risk of volatility, but I do not think that it is anywhere near as big or dangerous a risk as the volatility that there would inevitably be if you had income tax, National Insurance and all these other taxes as well. That is why I make the point about the deficit. It is important that Sinn Féin accepts that there is a multibillion-pound deficit. We modify the methodologies that we use, and we can look at those further to try to get more accurate figures, but I sense that that will always produce a result that shows a multibillion-pound deficit and a multibillion-pound subvention, and, of course, that argument does not suit Sinn Féin. Therefore, I believe that it will never accept the methodology underpinning any of the work done on that.
Mr Byrne: I appreciate the Minister giving way. Does the Minister believe that the regional economy can be made economically viable or sustainable in the medium to long term, given the subvention of £9 billion plus or minus £1 billion? Given that we will get corporation tax, which may be a net cost in the short term, will we be able to proceed and hold the economy together without a strategic economic plan? If corporation tax leads to a recovery in the private sector, the Treasury will be the net beneficiary through increased income tax receipts, increased VAT receipts and a reduction in the welfare payments to the region.
Mr Hamilton: The Member has reiterated the point that he raised in his contribution about the lack of an economic plan. The Executive have agreed an economic strategy, which his party, through its representation on the Executive, has signed up to. So, there is an economic strategy that takes us up to 2030. The first point in the Member's intervention gets to the nub of what I am trying to discuss: how long would it take to become a place that can stand on its own two feet, whether in the medium or long term? Some people's idea of medium and long term is different from that of others, of course. My belief is that that is what we ought to strive for and what we are striving for. That is what our economic strategy is about. That is what devolving powers on corporation tax to try to transform our economy is all about. We are trying to close the gap.
In recent times, the only two periods when we significantly closed the productivity gap were when there were huge injections of public spending into Northern Ireland. That will clearly not happen in the short term, never mind what the medium term might hold, so we will have to do things differently. That is why we have been pursuing the economic strategy and pursuing corporation tax. The subvention, which, the Member accepts, is sizeable, means that we should be cautious about full fiscal devolution. We run the very serious risk of huge volatility and huge reductions in the public spending that, in the short to medium term, we would be very reliant on. Put simply, at this minute, the Northern Ireland tax base is not strong enough to sustain that.
We do not compare favourably with, for example, our neighbours in Scotland. When pursuing more and more fiscal devolution, they do so on the basis of an economy that may be going through issues with the price of oil and went through issues in the past with the financial services sector, but is in a much stronger position economically than we are. Therefore, I believe that it can deal with more than we can. In the past, I have compared this with children growing up. Scotland is a child of about five and we are a child of one and a half, yet some propose that we take the stabilisers off our bikes at exactly the same time. The five-year-old will cope a little better. The one-and-a-half-year-old will fall over. That is where we need to be very careful.
Mr B McCrea: I thank the Minister for giving way. I will not detain him too long. I would just like it on the record that income tax and VAT are likely to be bigger and more stable than corporation tax. You could argue that, in looking at it the round, there would be a balancing act involved. I will conclude by saying that the Minister is right to look at it before jumping straight into things. It is something to bear in mind. It is important that we understand where the volatility really lies.
Mr Hamilton: I remember having a debate with the Member in the past about income tax and its volatility. Volatility in percentage is smaller, but, because it is a bigger take, the percentage is worth more. The solidity of public spending moving forward is where the problem lies.
I thought that Ms Boyle's contribution was an interesting one, as indeed were those of many of her colleagues. The picture of Northern Ireland that they were painting was one of huge strengths in the economy. That is not something that I am used to hearing from the Sinn Féin Benches, but I agree with it nonetheless. It is undoubtedly the case that we have a lot of strengths in our economy that have been enhanced, improved or, indeed, started and encouraged as a result of policies that were pursued by the Executive and various Ministers. We have a well-educated population. We have a good global location. That is not something that the Executive have effected but a fact of life, I suppose. We have improving skills and improving R&D. We have a growing FDI attraction. Indeed, as Mr Flanagan talked about, we have an international reputation in certain sectors. I agree, but we have to accept that, at the same time, there are structural weaknesses in our economy that we are trying to iron out and deal with. By that, I mean the highest level of economic inactivity and under-representation in higher value-added sectors in our economy, such as finance and business services, and a low level of exports.
It will be a long road for us to travel to transform our economy. We have made huge progress in the past number of years. We should welcome that. We should all appreciate the efforts that have been put in by Ministers in this place and, indeed, our captains of industry, who have made that happen. It is absolutely the case that it is we in Stormont — politicians who are locally elected, representing local people — who are best placed to take our economy further down that long road of transformation. What I will say to Members opposite — I hope that they appreciate the spirit in which all these comments have been made — is that we have to do it step by step. We have to make sure and steady progress down that road rather than try to fast-track to the end, only to find ourselves very quickly back at the start.
Mr Ó Muilleoir: I thank the Minister for giving way. I thought that he was starting to lose a bit of pace there anyway.
I have two points to make on trying to find some common ground. First, the Minister will accept that we need more transparency. We talk about trust and transparency from the Treasury. I take it that he accepts that we would like more transparency in Treasury figures. I had a little debate with it recently when trying to get an exact figure for VAT.
The second point is that we can have the fiscal levers and then decide when to use them. In fact, that is exactly what we will be doing with corporation tax. A week does not go by in the Chamber without someone's voice being raised in support of the tourism industry. We know that it is suffering under a 20% VAT rate and is asking for some flexibility. That surely is an area in which, if we had the fiscal lever, we could decide whether to pull the metaphorical trigger.
Do you think that we need more transparency? Having the fiscal levers and using them are two different things, but surely we need to have the choice.
Mr Hamilton: I am not batting for the Treasury, but, on the point about information and transparency, particularly around tax take, I do not think that it was designed to produce regional figures. I think that the Treasury is grappling with the impact of devolution as well and, indeed, the demands in English regions for more transparency around these things. It is now starting to produce better estimates of tax take across the regions. We are using that work to inform our work. As it develops better transparency, we will all be the beneficiaries.
I do not think that the Member was in earlier for Question Time, when Mr Hilditch asked me about the VAT rate for the hospitality sector. A great campaign has been led by organisations such as Pubs of Ulster and other groups from the Northern Ireland hospitality industry that is now starting to spread across the UK. They took that campaign to Westminster as recently as last week. I wrote to David Gauke, who is the Financial Secretary to the Treasury, at the start of the month asking him again to look at the issue. There is one more Budget left before the election, and it is an opportunity to do something on it. It would not be specifically for Northern Ireland but would have to be for the whole UK. In writing to Mr Gauke, I cited the very good evidence from the Irish experience. Since 2001, 30,000 jobs have been created in the tourism sector, and it has produced a net benefit to the Irish Exchequer of €165 million. That is good, solid evidence and is why Michael Noonan was then able to stand up and say, "I am keeping this cut in place indefinitely". That evidence almost makes the case for us in Northern Ireland. Even though you cannot have a differential rate within a member state, because we have the land border — it is the same issue with corporation tax — I think that there is a compelling case for Treasury Ministers to look at it. That evidence from the South shows that it is not simply a cut and that they will lose revenue but that they can make some money back through increased PAYE and National Insurance contributions.
I will turn to Mr Ó Muilleoir's comments. He prefaced them by saying that he wanted to be helpful, and I think that he was. He made comments around the investment fund and the social innovation fund. At Question Time today, I pointed out, in response to questions from Ms Sugden and Mr Humphrey, that I see the potential to expand the number of investors who are putting money into the investment fund. The £40 million that we allocated in the draft Budget can almost be seen as seed capital. That is our initial contribution, and I want that initial contribution to grow to at least £100 million. We hope and expect to draw in another £1 billion from the European Investment Bank, and the feasibility study that is being carried out on our behalf by Deloitte and working with the EIB will draw out the sectors that that may be invested in. I do not see that as the end: £1 billion is impressive enough from a standing start, but it is not the end as far as I am concerned. We will absolutely work with EIB on an ongoing basis to, if possible, draw in more funds from it, but I see the potential of other international investors who we have started conversations with already. I do not want to disclose who they are for obvious reasons, but there has been an initial positive response from those organisations and institutions that would operate in that sort of space. I intend to have officials take that further forward and will personally intervene as and when required to try to make that happen. We should not be satisfied with a £1 billion fund; we should be looking to grow that to £2 billion, £3 billion and beyond. The impact that that will have on infrastructure in Northern Ireland will clearly be immeasurably better the bigger the scheme is.
There will be a consultation on the development of the social innovation fund. That will launch very soon. It will use the dormant accounts money initially and will be focused on loans rather than grants so that the £5 million that is there does not disappear very quickly, as would be the case with grants, but is there, gets paid back and is there for others to benefit from in the future. Those others will be social enterprises, charities, community organisations and faith-based organisations. It also has the potential to draw in additional investment. The Member has, in correspondence to me and in the Chamber today, drawn my attention to examples from other jurisdictions, and I am happy to follow those up with him and, indeed, with the organisations concerned.
Jo-Anne Dobson talked about the in-year financial difficulties. I give Mrs Dobson credit for being one of the only Members who stuck to talking about the Bill. She spoke more about in-year financial issues as opposed to next year's issues and was almost a lone voice in that regard. She rightly started off by placing blame for the in-year financial difficulties where it should lie; namely, that we had to find £87 million in year to pay penalties because of our failure to move forward on welfare reform. Whilst we are grateful that there has been a resolution on welfare reform, we should not forget that it has come at the cost of £100 million being lost to date to the Executive in their ability to invest in essential public services and to help many people who are on welfare.
She is wrong, though, in saying that many of the problems in-year were the result, not of welfare reform, but of other pressures that the Executive should have known about.
Two point three percent of the 4·4% in-year reduction was a result of the need to find money for welfare reform penalties. The decisions that the Executive had taken, and for which finances had to be found, included the historical institutional abuse inquiry and local government reform. I am sure that she did not intend to say, although it sounded like it, that the UUP opposed funding for those things. I know that they did not want to fund the social investment fund a couple of weeks ago, and I hope that they are not now saying the same of the historical institutional abuse inquiry and, indeed, local government reform.
She asked why there were so many fluctuations in-year and whether there had been so many redistributions and reduced requirements in any other year. Mr Girvan made the point during the debate. One of the principal reasons for such large changes to the Budget in-year was the failure to move forward with the A5, the Minister responsible for that being, of course, her party colleague, Danny Kennedy.
She raised several issues to do with health, including the pressures on health, which are well recognised. She did not recognise the fact that £500 million of efficiencies had been delivered since DUP Ministers took control of the Department of Health or, indeed, that there has been a £200 million plus allocation to the Department of Health in next year's Budget, which reflects that 46% of our expenditure goes on health.
I now turn to comments made by Anna Lo. Ms Lo made a very good case for investment in the environment in Northern Ireland. I have been encouraging privately, and I encourage her to take up with environmental NGOs the need to alter slightly the way in which they present their debate. It is an argument that is relevant to Mr McCrea's point about culture, arts and leisure. If the Executive's number one priority is, as it has been for nearly 10 years, to grow the economy, virtually all expenditure, particularly in those areas that see themselves as a bit Cinderella-like, needs to be argued for first and foremost through an economic prism. That does not mean that there is no merit in protecting the environment or in having a good arts community and cultural infrastructure.
In an environment where we have less money, the argument that will find more favour, and therefore perhaps more pounds, is the one that identifies the contribution to the economy through investment in environment or in culture. Mr Bradley on the SDLP Benches raised the issue of heritage-led development, something that I have backed in previous Budgets and am backing again in next year's. One of the reasons for my taking a personal interest in that area is the work of the Northern Ireland Environment Agency (NIEA) to present the argument for investment in heritage-led development from the perspective of the benefit to the economy and the jobs that it creates. Therefore I say to Anna Lo: yes, there is merit in arguing for what the Department of the Environment does to protect the environment, but there is also a need to make the argument about what investing in the environment means for our economy.
Ms Lo highlighted the concerns of the voluntary and NGO sectors in environment about Budget cuts. I say to the Minister of the Environment what I would say to any Minister: the voluntary, community or third sector should not be seen as an easy target for cuts in difficult financial times. There are some Departments and some Ministers who think that the third sector is an easy target. They think that they can go after them, because, "I do not have to worry about them. I am not responsible to them. They do not work for me. They are not in my Department, so they are an easy target for cuts." That should not be the way, particularly when those organisations are often delivering services in a much more efficient and effective way than central Government could do.
Trevor Clarke raised concerns about the management of the DRD budget, which concerns I share. It is regrettable that that Department is heading for an unacceptable overspend in this financial year, because the Minister failed to plan properly for the Port of Belfast receipt not being obtained. He failed to plan for that, and spending on the basis of having money that you do not have is not the way to manage your budget, particularly in difficult financial circumstances. I share Mr Clarke's concern and that of his Committee about the poor estimating of the cost of the Coleraine to Londonderry line upgrade.
Mr Flanagan raised the usual issues that he does around investment, or the lack of it as he sees it, in Fermanagh. I note that today, the MP for Fermanagh and South Tyrone issued a statement calling for more investment in the constituency. It is interesting that, in making that call, never once has the MP for Fermanagh and South Tyrone asked me or the economy Minister for a meeting to look at investment, or the lack of it as she would see it, in that area. Such negativity from Sinn Féin on this issue does not make the job of the economy Minister in attracting investment from anywhere any easier.
Mr Allister made the point that the values and ethos of a Government can be revealed by its Budget. He asked what the Executive value and could not find what they value through this Budget. This Budget is based on many values and principles, including support for key public services. That is reflected in an allocation of an additional £204 million to the Health Department, and which reflects the value that we place on the health service, which the Member voted against. It also includes a £60 million boost, over and above the draft Budget allocation, for the Department of Education, which has been topped up by the Minister of Education with a further reallocation from within his budget of around £17 million or £18 million, so that £80 million is going into the schools budget. That reflects the value that this Executive place on education and on schools, a value not reflected by Mr Allister's vote against the Budget.
This is a Budget that seeks to underpin economic growth. There is a 10% increase for the DETI budget to ensure its continued impressive record in attracting investment into Northern Ireland and in creating jobs in Northern Ireland. That is a value that this Budget underpins, a value, again, not reflected by Mr Allister in his vote against this Budget. It is a Budget that also underpins economic development and growth by boosting the expenditure in the Department for Employment and Learning from its draft Budget allocation by £35 million, an allocation that Mr Allister voted against.
I do not need to ask too much about what Mr Allister's values are. His value, of course, and his sole stated purpose, is to see an end to this place. He wants to see a return to direct rule. That is the value and the ethos that he has.
It is absolutely true. The Member wants a return to direct rule. That is the outworkings of the policy he has —
Mr Allister: I want durable, workable devolution, not this farce.
Mr Hamilton: Absolutely, Mr Robinson. He loves being here. He absolutely loves it here. He wants to see a return to direct rule. That is the outworkings of the policy that he would have us pursue. He wants to see an end to devolution and an end to Stormont. [Interruption.]
I would be the first to accept and agree that this system of government is far from perfect, but it is a hell of a lot better than the system of government —
Mr Deputy Speaker (Mr Beggs): Order. All remarks should be made through the Chair and Members should avoid making remarks from a sedentary position.
Mr Hamilton: The system of government that we have, imperfect as it is, is far, far better than a return to direct rule and an end to devolution, which the Member advocates. In terms of helping vulnerable people in Northern Ireland, we would have full-blown, unadulterated welfare reform if we returned to direct rule. On 27 January in this House, after railing against the package of reforms and the package of measures to mitigate welfare reform today in the Chamber, Mr Allister said:
"I think there were sensible reforms to be made about the bedroom tax ... that had to be ameliorated". — [Official Report, Vol 101, No 4, p64, col 2.]
However, in wanting and seeking a return to direct rule and an end to devolution, we would not have a package of measures to ameliorate the bedroom tax or any other part of welfare reform. The Member sits and shakes his head but that is the truth. If there was a Conservative — [Interruption.]
Mr Allister, there is nothing to explain when your position is wanting to see the collapse of this place and the inevitable return to direct rule, which you once described as a return to Dublin rule.
Mr Hamilton: A return to Dublin rule is what the Member is advocating as the natural outworking of the policy that he is pursuing.
You would have the Conservative Party with the Liberal Democrats in power implementing —
Mr Hamilton: — welfare reform without any changes, without an end to the bedroom tax that Mr Allister said in the Chamber almost three weeks ago:
"I think there were sensible reforms to be made about the bedroom tax etc that had to be ameliorated". [Official Report, Vol 101, No4, p64, col 2].
There would have been no amelioration of the bedroom tax had it not been for devolution and the existence of this place, so what are the Member's values and ethos when he wants to see a return to direct rule?
He rails against borrowing, and he has been told in this place before about the borrowing powers that we have, how they are the envy of other Administrations and how other Administrations and devolved regions of the United Kingdom want the borrowing powers and flexibilities that we have secured. It begs the question about Mr Allister's values when he would not have borrowed in difficult times to invest in infrastructure projects, the new roads, hospitals and schools that, otherwise, we could not have afforded.
It says something about Mr Allister's values and ethos that he would not have borrowed to rescue the members of the Presbyterian Mutual Society (PMS). Borrowing is how the rescue package for the PMS was funded, so it says a lot about the Member's values and ethos when he rails against borrowing, why we should not be borrowing and why we should not have borrowed, when he would not have invested in much-needed infrastructure projects or in any PMS rescue package.
It says a lot about the Member's values and ethos when he wants a return to direct rule and talks about the economy and trying to help out the little guy, when he would see, as a result of a return to direct rule, hugely increased household taxes, an almost immediate introduction of water charges — £500 bills landing on the doormats of everybody in Northern Ireland courtesy of Mr Allister — increased rates bills —
Mr Allister: It is all about losing the limo. It is all about losing the limo.
Mr Hamilton: — and an end to concessionary fares. Any of us involved in the talks before Christmas know fine well that the Government in Westminster would love to get their hands on the things that we are doing in having no water charges, the lowest household taxes in the whole of the UK and the concessionary fares scheme. They would want to bring to an end industrial de-rating, which has kept £300 million in the pockets of local businesses. There is also the small business rate relief scheme that is helping local businesses to the tune of £20 million per year. Those would all go if there was a return to direct rule.
In questioning the values and ethos of this Budget and this Administration, Mr Allister revealed more about his values and ethos. Not once in his diatribe did he offer a single positive alternative to this Budget — not once. That is Mr Allister all over: no positive alternative offered.
Mr Danny Kinahan congratulated — he was here briefly —
Mr Allister: You did not tell us about how you treated the lady —
Mr Hamilton: Mr Danny Kinahan congratulated the education sector for securing a boost to the education budget. However, on a tweet that he put out on 19 January, he said:
"Excellent, £63million more to Education..UUP and schools' pressures worked".
At least he had the courtesy and good grace to acknowledge the pressure applied by the schools sector to the Minister and myself. You can certainly congratulate them for the lobbying that they did. One organisation that you cannot congratulate for the £63 million increase to the education budget is the Ulster Unionist Party, which voted against the £63 million allocation to education in the Budget.
Mr Basil McCrea started by saying, and I am paraphrasing, that he had been at livelier wakes. I think that was the import of what he said.
He talked about the DCAL budget, and I touched on some of these points already. Nelson McCausland also raised issues and concerns about that in his capacity as Committee Chair. It is not my job to do the Minister of Culture, Arts and Leisure's job, as attractive as that might be to all of us at times. She has to prioritise her budget as allocated to her. She has to balance competing priorities between libraries, museums, sport and the arts. That is very difficult to do on a budget that was already very small and that has been reduced by 8·2%. The cut that the Department is facing is lower than that that was initially applied to it, because we as an Executive accepted that making a 15% reduction to that budget would have proportionately decimated it more than others.
The Member said it was only £10 million, which is a lot of money, and to say "only £10 million" is perhaps accurate enough in the context of our overall Budget. Someone might say something like, "It is only £10 million. Can you not just give it to us?" The question to the Member, as it would be to anybody who says that, is this: where are you going to find that £10 million? That is the problem —
Mr Hamilton: Let me just finish.
That is the problem that I and anybody who might occupy my chair has. Looking at the Northern Ireland Budget at a global level, we find that we have to balance competing priorities, just as Ministers in their Departments have to balance competing priorities.
Mr B McCrea: I thank the Minister for giving way. I accept his point. I understand that it is £10 million here and £10 million there and that we have to find cuts. All I felt that it was appropriate to do was to argue that, when you realise the draconian impact of this, you find that maybe these arguments have not been made elsewhere, so somebody should do it. I apologise if I have come forward with details. I understand that the Minister cannot be on top of every single line of the Budget, and I have taken on board what he said about perhaps needing to reframe the arguments in the context of the Executive's economic priorities, with the result that there might be a different way to go forward. Nevertheless, I still think that it is appropriate for me to stand up and say, "These are the impacts of this Budget. Do we really want to do this?"
Mr Hamilton: I am not saying that the Member should not have brought forward the long list of concerns. I have no reason to question the validity of the issues that the Department is putting forward. I am not saying this about the DCAL budget, but as we have seen in some Departments, between draft and final Budgets and even since then, to try to win an argument with the Executive or elsewhere, some Ministers will put out scare stories on what is almost the worst possible position.
It is only £10 million in a Budget of £12 billion, but it is still difficult to find. It also has to be justified. That is the point that I was trying to make. Finding £10 million would offer outright protection in cash terms to the Department of Culture, Arts and Leisure for next year. However, finding more money for protection in cash terms is an argument that the Education Minister, who still faces a cut, could make, as could the Justice Minister, who still has to deal with pressures and, indeed, a reduction. The Environment Minister, the Minister for Employment and Learning or whoever it might be could also make that argument. So that is where there needs to be a justification and a better argument. I am sure that the Minister is grateful that the Member is rounding in behind her and trying to help her, but it is an argument that is more for her to make than anybody else. It is certainly her job to do that.
Joe Byrne was our penultimate Member to speak, and he raised his concerns about the voluntary exit scheme. He called finding 20,000 fewer posts across the public sector a "tall order". Again, this is where I get confused, although some might say that I am easily confused. The SDLP agreed that figure. On 19 December, the SDLP agreed a position, which is now being referred to as the Stormont Castle agreement. The position was agreed amongst ourselves that our target would be a reduction of 20,000 in the public sector's headcount. It was a position that was taken to the Secretary of State, who then took it to the Prime Minister and sold it to him. It helped to inform their response to our overall call for a financial package.