Belfast Telegraph

Why the Prime Minister's ideas merit debate in NI

Analysis & company report

By John Simpson

Prime Minister Theresa May announced three major policy steps during her conference speech last week. They merit examination, even if their delivery was marred by her cough and a prank.

Each policy step involved devolved topics but, nevertheless, call for some Northern Ireland rethinking.

In Great Britain, statements are expected on putting a cap on electricity prices, allocation of an increased budget for affordable and social house building and reconsidering finance for students in universities.

Each policy area will attract local interest and test the need for separate but parallel decision making at Stormont.

Electricity prices: In NI we have devolved responsibility for energy policy, taking into account the all-island wholesale electricity market. The all-island market provides for generating capacity and other features, including on-shore wind supplies of electricity, which can be brought together in an all-island marketing arrangement. Differing arrangements for the retail (or supply) market to final customers can be added north and south.

Households in NI enjoy prices influenced by regulatory processes that show a satisfactory, even slightly favourable, pricing regime. For major industrial users the outcome is less satisfactory. The regulatory system in NI concentrates on the impact on domestic consumers which takes little account of the problems for large industrial users.

The emerging proposals in GB have mainly domestic consumers as a target. The issue for NI is whether a reconsideration of electricity prices should return to the major local difficulty of large industrial users.

Housebuilding: An extra £2bn to add to an existing £7bn budget to incentivise the building of more affordable houses should have a strong appeal in Scotland and NI. By implication the Barnett formula should add extra capital funds, possibly an extra £100m for NI.

Just as there is a need to increase the supply of new housing in England there is a parallel merit for NI. However, whilst acknowledging a personal non-profit making interest in part of this debate, across NI the scale and financing of additional house building is currently inadequate.

The Housing Executive no longer contracts to build new housing units. It exists with an inherited budget and a need to repay older borrowed funds at rates which now mean that its operations must be annually grant-aided on a disproportionate scale. Therefore there is reliance on housing associations for social housing. The scale of social housing is well below what would be desirable particularly because of the need to replace older housing.

The message to Stormont is that NI is not doing enough to maintain, never mind improve, our housing assets.

Student financing: Northern Ireland students who study here pay fees at about half of the English level. If, as many do, they go to GB, then they incur higher fees in England and Scotland. Whichever enrolment route is chosen, the merits of an easing of the weight of the present fee burdens applies here.

Local students, and the two local universities, all can claim that some alleviation of the impact of the present financial methods is well merited and the time has come for Stormont to rethink its policies.

A reform of electricity prices might be accomplished through a redistribution of the impact of regulatory reform but changes in housing policies and student financing will both fall on the Stormont budget. Extra support from the Treasury may not be easily won. The message to the incoming Executive, if it arrives, is to be prepared jointly to solve problems.

Belfast Telegraph