McGuinness warns on £87m 'threat'
An £87 million Government penalty on the Northern Ireland Executive for its failure to implement welfare reforms should be "frozen" ahead of a fresh round of political talks in the region, Martin McGuinness has said.
Stormont's Sinn Fein deputy first minister said lifting the financial "threat" would enable renewed negotiations to take place in a more positive context.
But his partner in government, Democratic Unionist First Minister Peter Robinson, dismissed his colleague's demand, insisting the money had already been withheld by the Treasury.
Mr Robinson reiterated his party's warning that if the Executive breaches its spending limits this year by not absorbing the £87 million cut then the Treasury could seize control of elements of public spending in Northern Ireland.
"If we can't run our finances properly because of Sinn Fein's veto then the Treasury could decide there are aspects of it that they will run," he said.
"They may well take some decisions or even impose a presence in dealing with financial matters."
The bitter political impasse at the Executive over introducing the UK Government's controversial changes to the welfare system is one of a number of disputes that continue to place a question mark over the future of the power-sharing institutions.
The five parties in the mandatory coalition are also at loggerheads on three major outstanding peace process issues - flags, parades and the legacy of the past.
At the weekend Northern Ireland Secretary Theresa Villiers announced that the UK and Irish governments were going to convene a new round of talks to try to forge agreement on the wrangles creating instability at Stormont.
The failure to implement welfare reforms in the region - primarily due to Sinn Fein opposition to the policy - has seen the Executive landed with the £87 million penalty from the Treasury for the year, a sum that is set to increase in the future.
The Government says the sum reflects what Northern Ireland needs to pay to ensure parity with the parts of the UK where the reforms have been implemented.
The impact of the penalty will become clear next month if ministers factor the shortfall in to quarterly budgetary 'monitoring round' adjustments among Executive departments.
But it is not yet certain whether any agreement to implement the cuts will materialise in October - raising the very real prospect of the Executive busting through its Treasury spending limits.
Mr McGuinness, who said the British government's attitude and policies in the region were "part of the problem", urged Ms Villiers to put a freeze on the penalties pending the outcome of the new talks.
"The upcoming talks need to happen with all speed, they need to happen against a backdrop of freedom from pre-conditions or threats of any description and that includes the threat of the imposition of £87 million impacting on our ability to negotiate the way through on the October monitoring challenges that we face at this time," he said.
"When I last met with Theresa Villiers I put it to her that the British government should not implement that threat in relation to £87 million."
But Mr Robinson said the money had already gone. "The Government have withheld that money from our block grant so it's not there, it's no longer there," he said.
The DUP leader said Sinn Fein appeared to be in "denial" about the need to cut the money and said if they failed to do so the Executive would be facing a stark future.
"That is a very serious position for the Executive," he said. "It puts us into default in relation to the spending limits in Northern Ireland.
"We would be penalised for that next year and unquestionably Treasury will start looking at different ways of funding Northern Ireland."
He suggested money could be allocated to Northern Ireland on a month to month instead of yearly basis in the future, or there even could be direct intervention by a Treasury minister or officials.
"They could take some of the decisions themselves for us, because Northern Ireland is not a sovereign government," he said.
"The United Kingdom is a sovereign government so they could take decisions for themselves."
He added: "Let's be clear they give us money to run Northern Ireland and if we spend more money than they give us would anybody be surprised if they take action."
The new talks' initiative was announced as unionist parties in Northern Ireland await a formal response from the Government on their demand for a commission of inquiry to be established into arguably the most contentious parading dispute in the region - at the Woodvale/Ardoyne interface in north Belfast.
A decision by the Government-appointed Parades Commission adjudication panel to restrict an Orange Order march through the area in July prompted unionists to walk out of the last substantive political negotiations at Stormont.
That ill-fated talks bid had been convened just over six months after an initiative chaired by former US diplomat Dr Richard Haass and Harvard foreign affairs expert Dr Meghan O'Sullivan also ended in failure.
Mr Robinson said he hoped Ms Villiers would agree to setting up the commission of inquiry - something he insisted was a "reasonable" proposal.
He said if she refused it would not impact on the DUP's involvement on any talks touching on the budgetary issues or the workings of Stormont.
But he warned it may influence his party's attitude in regard to the other outstanding problems.
"It wouldn't impact on my attitude toward dealing with the issues of welfare reform and modalities of Stormont but clearly if she wasn't willing to have a fruitful discussion on the parades issue it affects how we would respond to any suggestion that we deal with the parades and past and flags and emblems," he said.
Sinn Fein President Gerry Adams said none of the disputes facing the parties were insurmountable.
"All of the issues can be resolved," he said. "Whether they are budgetary issues, whether it is welfare cuts issues, whether it's outstanding aspects of the previous (peace process) agreements, whether it is the items that the Haass/Meghan O'Sullivan proposal dealt with - all of those issues can be crunched down on if there is the political will to do that and Sinn Fein have very, very much the political will to sort these problems out."