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Budget gets go-ahead but welfare still unresolved

By Liam Clarke

Published 25/06/2015

Arlene Foster said the full Stormont House Agreement had to be implemented in order to proceed with the Budget passed by the Assembly
Arlene Foster said the full Stormont House Agreement had to be implemented in order to proceed with the Budget passed by the Assembly

The Assembly has passed Arlene Foster's "fantasy budget" - a move that buys a fragile Stormont a summer holiday before potential financial meltdown.

Despite the reprieve, politicians still haven't resolved the root problem - welfare reform.

There is still a £604m overspend in the next financial year - and the budget ignores this.

Sinn Fein gave its "conditional support" to the plan, effectively pushing the crunch point another few weeks down the road.

Should the parties fail to overcome their differences over welfare reform, the impasse could yet collapse the devolved institutions.

Finance Minister Mrs Foster summed up the position, saying "the Stormont House Agreement (SHA) really underpins this Budget" and without its implementation "the Assembly and the Executive do not have the mechanism to move forward".

"So, we need to implement the full Stormont House Agreement," she said.

Although the bill passed by cross-community majority, it is not clear that the SHA, which releases loans in return for cuts, will be implemented. Sinn Fein and the SDLP are still speaking of it being inadequate and all the parties are determined to ask for an improvement in the coming months.

Stormont may run out of time in October when there is a monitoring round.

During yesterday's Assembly debate, Ukip MLA David McNarry was trenchant in his criticisms of the Executive's performance.

"We pay for the carnage of financial ruin, we pay for the rejection of the Welfare Reform Bill and we pay for a tactical readjustment of corporation tax, all because, in a bout of madness, politicians made a promise that they could not keep when they failed to deliver the biggest handout of all time, promising everyone on benefits that not now and not ever would they find their benefits income reduced."

The Government is now holding the devolution of corporation tax over us. Reducing the business tax to the 12.5% charged in the Republic would cost Stormont at least £300m a year.

The Executive was previously pledged to reducing the tax in 2017 but recently Sinn Fein has questioned the cost.

Secretary of State Theresa Villiers stressed that powers over corporation tax were not yet in the bag, during Northern Ireland Questions at Westminster yesterday. She argued that the Executive must learn to live within its means and that if the SHA is implemented Northern Ireland will have the most generous welfare system in the UK - although paying for the improvements comes out of Stormont's purse.

Ms Villiers called on Sinn Fein and the SDLP to live up to commitments they made in the agreement.

She confirmed last night that she will host a meeting to review implementation of the SHA along with all the Executive parties and the Irish government.

"As I made clear in the House of Commons, the situation is very serious," she said.

Belfast Telegraph

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