Stormont's inadequate set-up and the welfare row... Northern Ireland's First Minister writes exclusively for the Telegraph
On March 26, 2007, in a moment the world will long remember, people discovered that a set of politicians in Northern Ireland had reached the most unlikely of agreements. Those who had been age-old adversaries and who held manifestly diverse opinions and outlooks had determined to work together in government to provide the opportunity of peace, stability and entry to a new era of promise for all those who live here.
The nature of that agreement was unique not alone because of the inclusion of those with opposing philosophies in an Executive but equally because the exceptional operational elements made its functioning cumbersome, time-consuming and sluggish. The structures required cross-community agreement for every significant issue – a process that would have tested and defeated less divergent coalitions.
Perhaps not surprisingly, few have been prepared to take account of the difficulty of functioning in this challenging environment.
We were in uncharted waters. Yet to the disappointment of our detractors we not only operated the structures but also built upon them. The devolution of policing and justice – the most sensitive of powers – was agreed in 2010. The very prospect of such devolution, given the Executive's composition, was thought fanciful yet it was achieved without community upheaval or discontent. Those who predicted doom were dismayed when their prognosis was not borne out. Indeed in the Assembly election that followed, the electorate overwhelmingly endorsed those who had taken the decision.
There should be no regrets about either the St Andrews or Hillsborough Castle Agreements. They brought hope, optimism and new possibilities. The level of peace and stability achieved over the past seven years has allowed young people to live in circumstances that were denied to those of my generation. Those of us who lived through the carnage and conflict of the dark days of past decades know only too well how the peace process has transformed our lives.
Working for peace in a country steeped in deep discord is always going to be problematic and perilous. The propensity to drift and retreat into the old politics of division and point scoring still endures. It is often the automatic reaction to setbacks and responding to opposing views and actions on topical issues.
It's an unfair fact of life that the Assembly often gets a bad press. Of course in a five party coalition differences occur, doing business is slow and painstaking and it requires compromised outcomes; yet the Executive has succeeded in bringing more investment into Northern Ireland than at any time in history and more, on a population basis, than any other part of the United Kingdom. Peace, stability and a united approach to companies around the world from our two main traditions has been a winning formula. Joint visits to the USA, China, India, Japan, Abu Dhabi, Dubai, Canada and Brazil have all brought rewards. The peace dividend has been instrumental in our economic successes. Even aside from FDI, our achievement in supporting the creation of jobs has been unsurpassed. We have surged through every target set and reached levels never accomplished in the past. We have managed to keep local taxes the lowest in the United Kingdom and spent more on infrastructure than any government in our history. The task has begun, but there is so much more yet to do.
International sporting, business and entertainment events have become a frequent part of life. Can anyone imagine 20 years ago the world's political leaders coming to Northern Ireland for a G8 Summit? Would the Giro d'Italia or golf's Open have chosen to come here without the transformation of recent years?
While I could list a hundred Executive achievements some others choose to highlight issues upon which there is no agreement or where they deem there have been failings. Every year ministers and officials take countless decisions. It can hardly be a surprise that, in hindsight, some of those decisions can be questioned or it is concluded by some that better judgment could have been exercised. That is the same for every government across the world.
Nonetheless, the hard truth is that there are times when Executive disagreement casts a long shadow over our many successes. So politicians need to be honest and open, because, no matter how unjust, unfair or imbalanced any might consider such an assessment, there are many who are impatient with the Assembly's operation. Though delays and disagreements are unavoidable while operating under the Assembly's rules of engagement, the issue needs to be addressed.
For my part I argued from the day we left St Andrews that the processes we had endorsed could only be a short-term solution. My party published numerous policy documents highlighting the need for further reform and indeed, in my 2010 conference address, I stated that the present arrangements were a transitional phase and reforming them would form a vital piece of work for this mandate.
But, let us be clear, it was necessary to kick-start the process with a system that enabled the maximum ownership of the Assembly and Executive by the widest possible swathe of our community. That buy-in was essential to bolster support for devolution and allow everyone to feel part of the way forward. In order to achieve this validation, wide participation and community guarantees were deemed more important than realising the most effective processes and the best government arrangements. History taught us all that agreements are much more likely to succeed when supported by both unionists and nationalists.
Yet we always recognised that compromising effectiveness and efficiency for sound and justified political expediency could not be a permanent feature. It is my view that the present arrangements are no longer fit for purpose.
The breadth of the ideological spectrum represented in the Executive does, at times, mean agreement cannot be reached on some initiatives and at other times, in order to secure agreement, unsatisfactory compromises are reached. This does not trigger a breakdown of government, nor endanger the process but it leaves the process wide open to criticism. In many cases failing to agree on a new initiative is just the inevitable product of philosophical dissimilarities. Yet we are now confronted with such an issue that cannot be left on the shelf. It is transparently untenable for the Assembly and Executive to be sustainable while carrying the cost burden flowing from a failure to follow the national government's welfare reform changes.
The premise is straightforward. Northern Ireland is provided with a Block Grant amounting to about £10billion each year to cover revenue expenditure. In a letter from the Deputy Prime Minister, Nick Clegg, he states, "there is no possibility of further negotiation on additional changes to these reforms." This is consistent with the messages relayed directly to us by the Chief Secretary to the Treasury, the Secretary of State and the Prime Minister. Moreover, Mr Clegg makes it explicitly clear that all the costs for maintaining, operating and updating the existing computer systems needed to run the unreformed welfare payments would become the sole responsibility of Northern Ireland.
Mr Clegg indicates that the present annual UK cost is £1bn with programme changes (likely to be constant no matter how many claimants are on the system) amounting to £200-£300m each year. In follow-up discussions with the Department of Work and Pensions (DWP) it is evident that the running costs of an IT system do not vary proportionately based on the number of claimants contained in its database. If we wished to administer our own welfare system whatever savings could be made, in some areas, because of the smaller number of claimants, could be absorbed when staff and office accommodation costs are added and the annual penalties, already commenced, are also included.
Critically we need to be mindful that these costs are annual running and penalty costs. They do not include the cost of procuring and developing our own IT system, as the DWP system we would be inheriting, without charge, is over 20 years old and at the end of its life. The Department of Social Development have, in consultation with DWP, informed the Executive that this would cost in the region of £1.6bn. (£160m per annum for a 10-year period.)
None of this takes account of the future cost of maintaining a separate IT system for DLA nor does it address the practical role the Executive would have in developing its own welfare system and agreeing, on a cross-community basis, future welfare payment increases – if any.
As a consequence, and in summary, it would be unsafe to plan on an annual cost to Northern Ireland of IT and penalties much less than £1bn. In other words we could face a potential 10% reduction in our annual budget for the failure to implement welfare reform.
These additional costs in relation to welfare are in an already difficult public expenditure environment. Since 2009 our Block Grant from Westminster for the running of day-to-day services has remained virtually static at around £10bn. While inflation, wages and other costs continue to rise, our spending pot remains the same. This means there has been a cut in real terms of the money available to spend on public services.
This freeze is likely to continue until 2020 regardless of who is in government. Each year tightens our expenditure plans more and more. It is against that backcloth that the welfare implications need to be viewed.
We have all listened, with increasing alarm, to statements from Ministers of how £78m of cuts in June Monitoring will impact on the public. By comparison the prospect of cutting £1,000m from public services, which will impact particularly on the most vulnerable in our society, is unthinkable.
Devolution has been good for Northern Ireland. However, absorbing such entirely avoidable costs, with the consequent job losses of thousands of nurses, doctors, police, teachers and other public servants, is not a price Northern Ireland could afford to pay to maintain devolution. Indeed, it would be fantasy politics to try.
We opposed key elements of the Welfare Bill at Westminster and our Social Development Minister secured, through negotiations, specific flexibilities for Northern Ireland. In addition we agreed to remove the bedroom tax for all existing tenants and set up a £30m contingency fund for the hardest hit cases. As a result we would have a more generous welfare system than any other part of the UK. We recognise that the time for discussion is over and the consequent realities of what now needs to be done.
Of course in any democratic country parties should be entitled to hold policy positions that are important to them. But surely, if by doing so it exposes those they represent to calamitous consequences many times more harmful than the policy being opposed, it becomes necessary, as a simple exercise of pragmatic politics, to oppose the proposal in principle while in practical terms complying with its introduction. If that approach was taken, my party, hopefully with support from others, will do the heavy lifting and take the legislation through the Assembly.
To hold fast to a position that is incontrovertibly unsustainable and leads to ruin is frankly morbidly risible.
Those who argue that the General Election could throw up a different government that may change the direction of Welfare Reform, completely miss the point. Firstly, Labour say they would not make any change beyond dumping the bedroom tax (already dealt with in our proposals), and secondly even if they were to do so, it strengthens the reason to proceed now, thus avoiding all the financial penalties, and in those circumstances everyone in the UK would be spared the outcome — but we would not have been penalised for failing to proceed in the interim.
Beyond the pragmatic option only two realistic alternatives remain. One of those alternatives would involve returning social security powers to Westminster. In my party's 2003 manifesto we argued that benefits were a national issue and should not be devolved. Our advice was not heeded, but perhaps the government might now want to reconsider.
The other option, which has a number of attractions, would require reform to the Assembly's decision-making processes. Even if we were not faced with potentially terminal welfare decisions, Stormont's processes need to be fundamentally upgraded.
The DUP has, since the first period of devolved government in 1998, argued for a streamlined Assembly, a reduction in the number of government departments and further normalising our arrangements with a recognised opposition. Our most recent problems also inescapably point to the absolute need for reform of Stormont's decision-making arrangements. The backcloth of our divided society will still require arrangements that have regard for the need of widespread support across the community. Negotiations should not be directed to advancing any party's constitutional agenda or disturbing the existing, carefully constructed, constitutional balance. Rather the prime purpose is to make the Assembly and Executive operate more effectively and efficiently.
I judge that the weight of the issues to be resolved is such that it must be tackled in a St Andrews 2 setting, with government involvement.
I strongly believe that participation should be open to parties beyond those with members in the Executive. I recognise that with more parties involved, reaching agreement is more complicated, but the added value of greater community endorsement far outweighs the complications. Parties would be participating on the basis of seeking to improve the Assembly while taking account of the need to sustain broad support across the community.
I believe such steps are vital if we are to face the challenges of the future. It is possible to undertake these negotiations while the Assembly and Executive continue to operate. However, our present conundrum should not be dismissed as being no more than a seven-year itch. We urgently need to take steps towards improving the operation of the democratic institutions and maintaining the respect and support of the electorate. We all need to reimagine the way forward.
As I travel across the globe it is evident that what has been described as the Northern Ireland peace process has been an inspiration to many regions where conflict and division still rips communities apart and results in bloodletting and terror. I remain a strong supporter.
There is no road map to follow in current circumstances, however, unless we face and conquer the deficiencies in our arrangements we will not be the guardians of a process regarded as a splendid exemplar to the world but rather we will become a cautionary tale, warning of the dangers of drift and dithering.