Government considers welfare option
The Government has said it cannot rule out implementing welfare reforms in Northern Ireland over the head of the devolved Assembly.
Northern Ireland Secretary Theresa Villiers said a budgetary crisis that has engulfed Stormont over the ongoing failure to introduce the changes to the benefits system had forced her to "reluctantly" consider the option of moving the required legislation at Westminster instead.
"We've got to look at different options now," she said.
"It is not a road we want to go down but we do have to think about the options, one of which would potentially be legislating on welfare reform at Westminster."
Sinn Fein has expressed forthright opposition to any suggestion of the Government taking control of the welfare issue. The republican party might well consider withdrawing from the Executive in such circumstances - a move that would automatically collapse the institutions.
The future of the powersharing administration was thrown into doubt yesterday after Sinn Fein and the SDLP effectively vetoed a Bill to implement welfare reforms.
The fall of the Assembly legislation left the stumbling five-party coalition in Belfast facing a budgetary black hole estimated at around £600 million.
There is now the very real prospect of a senior civil servant stepping in to take over departmental spends later in the summer, under tight financial constraints.
One alternative would be for the Government to intervene and legislate to introduce the welfare changes itself.
While the Democratic Unionists have called for such action from London, Ms Villiers acknowledged such a move would meet resistance from Sinn Fein.
"Obviously with anything that involves Westminster involvement in a devolved matter is sensitive and we would need to, before even contemplating going down that route, discuss it very carefully with all of the parties represented in the Executive," she said.
"I accept that there would be all sorts of disadvantages with it and many would feel it wasn't the right route to go down."
She added: "It is very much a last resort, it's not something we would want to do but I'm afraid the vote last night means we have to consider those types of options."
Ms Villiers is due to hold individual meetings with delegations from the five parties in the next 24 hours in a bid to achieve a local accommodation.
Introducing the last Conservative/Lib Dem government's welfare reforms in Northern Ireland, after a two-year delay, was a key plank of December's Stormont House Agreement - a deal that had been heralded as resolving a range of destabilising disputes at the heart of powersharing.
The fall of the Welfare Reform Bill has now endangered other elements of the accord struck at Stormont House between the Executive parties and the British and Irish governments, such as the devolution of corporation tax powers, a major civil service redundancy scheme and new structures to address the legacy of the Troubles.
But, of more immediate concern, it poses an existential threat to the Executive, as ministers have failed to remove the burden of Treasury penalties for non-implementation, which are currently running at around £10 million a month.
Sinn Fein Deputy First Minister Martin McGuinness accused Prime Minister David Cameron of adopting a "partisan and pro-unionist" approach to the situation.
He also claimed the Government was refusing to come clean about on how multi billion pound spending cuts predicted for this parliament would impact Northern Ireland.
"The current crisis at Stormont has been created by the Tory government at Westminster and its dogmatic adherence to an agenda of austerity cuts," he said.
"Last week I challenged Theresa Villiers to spell out the impact of the Tory government's proposed £25bn in cuts to public services and welfare on people here. She refused point blank to do so.
"And despite the enormous challenges facing the political process David Cameron has refused to meet with me or to engage in any attempt to resolve the current difficulties.
"In stark contrast to this refusal, he rushed to meet with the leaders of both unionist parties to enlist their support for his on-going assault on public services and the most vulnerable.
"The source of the enormous crisis facing the Executive is the Tory cuts agenda. That crisis is compounded and deepened by the partisan and pro-unionist stance of David Cameron."
While initially backing the welfare element of the Stormont House Agreement, Sinn Fein withdrew its support three months later, claiming that Executive-funded top-up schemes to protect claimants losing out under the new benefits system were not as comprehensive as it believed were envisaged in December's negotiations.
Sinn Fein, the SDLP and the Assembly's sole Green Party representative used a contentious voting mechanism to kill the Welfare Reform Bill last night.
The "petition of concern" device meant that even though a majority of MLAs voted for the legislation, it fell because it could only be passed with the support of a majority of both nationalists and unionist members in the House.
DUP First Minister Peter Robinson was absent from the lengthy Assembly debate after suffering a suspected heart attack on Monday.
This financial year alone the Executive will have to absorb £114 million of Treasury penalties for non-implementation.
It is also facing repayments on a £100 million emergency loan it secured from the Treasury to plug last year's budgetary shortfall, which again was in part due to the impact of the ongoing penalties.
If the Stormont House Agreement's civil service redundancy scheme is not implemented then the Executive will also be faced with a huge unplanned multi-million pound bill to continue paying those employees who were set to leave.
Mr McGuinness warned the Government it would be a "huge mistake" to intervene on welfare.
Ms Villiers said she believed a resolution to the dispute could be achieved by the five parties without the need for the Government to step in.
But she made clear the Government would not be offering any money to fund a more generous benefits system in Northern Ireland.
"The history of Northern Ireland over the last 20 years or so has demonstrated once you get an agreement there are often setbacks in the process of implementation and always in the past Northern Ireland's elected leaders have found a way through," she said.
"I think we need to make sure we find one this time round."
The Conservative MP said she did not believe an Assembly collapse was imminent.
"I think we are very far from a collapse of the institutions at the moment, thankfully," she said.
"I think this is a serious situation but the world has changed from the days when if there was a big row at Stormont there was a suspension and a period of direct rule."
The Assembly would fold if either Mr Robinson or Mr McGuinness resigned. The Government could also suspend the institutions but it would require emergency legislation at Westminster to give it the power to do so.
Ms Villiers said she could not envisage any scenario where the Government would step in to suspend powersharing.
She said if Executive ministers were forced to hand their budgets over to the civil service, it would be damaging, but not fatal.
"That would be disruptive for the Executive, that damages the credibility of the Executive but thankfully it doesn't inevitably mean that the Executive ceases to exist and there is a period of suspension," she said.