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Budget cuts warning as Sinn Fein meets David Cameron

By Noel McAdam

Published 22/07/2015

Sinn Fein’s Gerry Adams, Michelle Gildernew, Mary Lou McDonald and Martin McGuinness at Westminster
Sinn Fein’s Gerry Adams, Michelle Gildernew, Mary Lou McDonald and Martin McGuinness at Westminster

The £600m black hole in Stormont's budget is set to massively increase, the Finance Minister has warned as the Sinn Fein leadership had a Westminster showdown with the Prime Minister.

Arlene Foster warned that the gap is set to increase by "hundreds of millions of pounds" following the Chancellor's latest wave of welfare cutbacks.

The DUP minister said the impact of the latest round of reforms underlined an urgent need for the Executive to finally agreeing a way forward over welfare.

But Sinn Fein said the fact DUP MPs joined nationalists in voting against the new proposals in the Commons showed parties here should unite to fight the plans.

Last night a Sinn Fein delegation, including Deputy First Minister Martin McGuinness and party leader Gerry Adams, held talks with David Cameron.

Mr McGuinness said the conversation had been "very forthright" on both sides.

He insisted Mr Cameron would need to give a "powerful input" in order to find a solution.

"I believe it was a very important meeting... there are huge challenges to be faced," he said.

"Our discussions dealt with those challenges, they dealt with the situation in regard to welfare, the situation in regard to the Comprehensive Spending Review and how that will impact on our institutions over a number of years."

Mr McGuinness said the idea of taking welfare powers back to Westminster was "absolutely unacceptable" to Sinn Fein.

Meanwhile, a leading economist has said cuts of up to 40% to some Government spending in Northern Ireland would have a major impact. Dr Esmond Birnie, PwC chief economist for Northern Ireland, said proposed cuts of up to £20bn by 2020 posed a particular challenge to the Executive.

"The Executive did not use the opportunity posed by the previous review to introduce fundamental reform," he said. "Now austerity is coming with a vengeance and we've a local 2015/16 budget which is broke and an impasse over welfare reform."

Mrs Foster said the £600m gap in her "phantom" budget passed by the Assembly would now significantly increase and the pressure on ministers will intensify.

"We haven't been told the full scale of that yet, but it will be in extra hundreds of millions of pounds. So this is even more pressure to have this dealt with and dealt with quickly," she said.

Her warning came as Chancellor George Osborne said that the financial situation at Stormont "can't be sustainable".

"We are working with the First Minister and Deputy First Minister to resolve this impasse but it clearly can't be sustainable that we allow a devolved administration to ignore the controls placed on it," he added.


On Monday, DUP and SDLP MPs voted to oppose the second tranche of welfare cuts. However, the Government won signalling a squeeze on child tax credits which will hit NI in particular. There are 140,000 families here who get the credits - 89,000 of them with family members in work - worth an average of £4,000 a year. DUP MPs objected partly due to the difference in the welfare and benefits cap between London and the rest of the UK - £23,000 in the capital and £20,000 elsewhere.

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