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Foster urges London to impose welfare reform as hopes of a deal fade for Northern Ireland

By Liam Clarke

Published 18/06/2015

Finance Minister Arlene Foster
Finance Minister Arlene Foster

Finance Minister Arlene Foster has told the Treasury that Westminster should intervene and legislate for welfare reform, as no solution to the budget crisis is being offered by nationalist parties.

And the Treasury has told Ms Foster that there is no extra money for Northern Ireland.

Ms Foster set out the budget pressures facing the Northern Ireland Executive yesterday to Chief Secretary to the Treasury Greg Hands, who she briefed in London. She described the meeting as "constructive".

"Obviously the failure to deliver on the welfare reform element of the Stormont House Agreement was central to those discussions," she said. "I also took the opportunity to set out to the Chief Secretary the current public expenditure position and the range of pressures confronting the Executive. Clearly there are some difficult decisions ahead.

"The Chief Secretary stressed there would be no additional funding for Northern Ireland.

"Furthermore, that it was imperative welfare reform was delivered and that control totals were not breached."

Stormont is now projected to overspend by more than 6%, which Chancellor George Osborne has described as unacceptable.

A DUP source said: "Arlene has put forward a budget which is based on welfare reform being passed - it doesn't add up otherwise. We hope for better, but the only way that is likely to happen is if it is passed at Westminster."

This would break a convention by which central government does not intervene in devolved affairs - but it could in an emergency.

If it happens, Deputy First Minister Martin McGuinness has indicated he may resign, but the DUP say it is up to Sinn Fein to find another way forward.

At present our finances are £604m in the red and rising.

The Stormont House Agreement last winter would have plugged this gap, mainly with loans. It also contained provision to protect local claimants from welfare changes out of Stormont's budget.

Sinn Fein later announced that the package from London wasn't sufficient and is now demanding more as the price for their support. They argue that London has introduced additional cuts which invalidate the agreement.

The result is what has been called a "fantasy" budget that ignores basic financial problems.

But the hope is it will buy some time to do a deal before Stormont runs out of money. Ms Foster's comments indicate that she does not believe agreement is likely without government intervention.

Yesterday, Ms Foster got permission from the Finance Committee to allow the bill accelerated passage through Stormont. It should now be passed by the end of next month at the latest.

The minister told the committee: "I know that there have been derogatory remarks in the media about fantasy budgets and all of this sort of thing.

"Let me assure you, I am not delusional. I know exactly what I am doing in relation to this issue and I was very clear in the Assembly that it is predicated on welfare reform being implemented. It is the only basis on which this budget can go forward."

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