Belfast Telegraph

Give us £2 billion and we have a deal, Mr Cameron

By Liam Clarke

The five Northern Ireland parties have reached agreement on welfare reform and a number of other issues - provided we get £2.14bn, much of it in aid and loans from the UK Government.

The Treasury has indicated to senior civil servants that it will not be making a response to the proposals until Monday at the earliest.

That means the talks may continue in the run-up to Christmas or in the new year if the parties do not accept the Government's response.

The demand was passed to the Government via Theresa Villiers, the Secretary of State, by the parties after lunch yesterday when the DUP delegation returned from the funeral of the mother of one of their members, Jonathan Bell.

Despite the hefty price tag, Ms Villiers quickly welcomed the development, although observers say she had been despondent last night. "There is a more determined and business-like approach over the last 48 hours or so which we probably have not seen in the first 10 weeks," she said.

A statement from Irish Foreign Affairs Minister Charlie Flanagan welcomed "substantial progress".

Ms Villiers said the Government was looking "very seriously" at the paper submitted by the five parties.

"There does seem to have been a degree of progress between the parties. Our response is going to have to take into account the deficit that we inherited and the limited resources we have," she said, hinting that there may be at least some uplift.

Last Friday David Cameron told First Minister Peter Robinson that he could make a limited amount of money available.

Ms Villiers said there were no plans for Mr Cameron to return to Northern Ireland before Christmas.

If a deal is nailed down he is likely to come back later, as is Gary Hart, the US envoy.

Last week the Prime Minister offered the local parties the capacity to divert £700m of its capital borrowing allocation to introduce a civil service redundancy scheme. He also offered them £10m a year over four years to deal with the past.

The parties have now responded with this joint approach. It involves more than double the borrowing to £2bn, £200m to deal with the past and £214m in welfare reform fines which the Executive wants returned.

Also, £800m borrowing would be used on a redundancy scheme for civil servants and another £800m on peace and reconciliation.

The Executive offered to put up £70m to help alleviate hardship as a result of welfare reform, though they want this topped up to £120m by the Government.

It seems likely that Mr Cameron will help out on dealing with the past, and he will be relieved that Northern Ireland has accepted welfare reform, even with modifications.

Considerable differences remain between the local parties over the past and parading. Unionists object to a number of themes, such as collusion, which are included in the section on investigating the past.

The breakthrough on finance began on Thursday evening as the parties discussed a paper on welfare reform drawn up by Malcolm McKibbin, the head of the Northern Ireland Civil Service. Dr McKibbin pointed out that hundreds of millions a year would be lost if we defied the Government on welfare reform and that they would have to be recovered in cuts or extra local taxes if Stormont was to continue functioning.

Other parties say that Mark Durkan, the SDLP MP for Foyle and a former Stormont Finance Minister, played a crucial role on promoting the agreement.

"Mark Durkan is a smart man when it comes to reading budgets and figures. In the end he said 'hold on' to Sinn Fein," one talks insider said.

He added: "When the SDLP started to shift Sinn Fein realised they were getting very isolated. There was the prospect of four parties agreeing certain issues and leaving Sinn Fein sitting on its own in disagreement. I think they acted to avoid that."

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