Last month I contributed an article to the Belfast Telegraph that covered a number of issues, including the arrangements at Stormont and the impact of welfare reform. In that article I indicated that the penalties and IT costs associated with the Sinn Fein proposal to continue with the existing welfare system would grow to £1bn per annum.
Moreover, I made it clear that the DUP were not prepared to make £1bn of reductions to Northern Ireland's public services. I can now provide further clarity on the issue of welfare reform.
As things stand there have been three options being considered as to how we deal with welfare reform.
1. The legacy UK system. Under this option Northern Ireland would preserve the existing regime but face rising penalties and IT costs. (This has been the Sinn Fein option.)
2. The new system being rolled out in GB. If we were to follow this model we would maintain parity with the wider system being rolled out in England, Scotland and Wales but suffer the impact of the more crippling aspects of the reform. (This is the Conservative/Lib Dem option.)
3. An enhancement of the GB system. We have sought and received authority to add functionality to the coalition government proposal by making operational flexibilities; declining to introduce the Bedroom Tax for all existing tenants and also providing a £30m Contingency Fund to support those hardest hit. (This is the option the DUP worked up with Sinn Fein but Sinn Fein Assembly leaders could not get their party to endorse.)
Until now there had been a settled view that Sinn Fein held a veto on welfare reform as we could not get legislation and regulations to implement a new system through the Executive and Assembly. Sinn Fein has a veto on Executive proposals and a petition of concern would block passage of any such measures in the Assembly.
Today I can announce that Sinn Fein's veto is now worthless as an instrument to force the retention of the existing welfare system. Their 'do nothing' option is now off the table.
We have received departmental advice on the process that would have to be followed if we intended to operate the legacy UK welfare system that Sinn Fein wants to retain. In addition we have taken legal advice on the procedures that the Executive would be required to follow.
In order to continue using the legacy welfare payment system a series of contracts would need to be negotiated and agreed with the numerous operating and supply companies that presently provide those services for the Department of Work and Pensions (DWP). If we were to procure our own alternative welfare IT system it would be necessary to enter into a procurement contract for that system.
The two departments (DSD and DFP) that would be directly involved in negotiating such contracts have DUP ministers. However, even if they did not, the issues are novel, contentious and cross-cutting and would need to be brought to the Executive for approval.
The £1bn year-on-year costs associated with this option would have to come from our £10bn annual budget. Such a reduction would cause tens of thousands of public servants to be made redundant, schools and hospitals to be closed, services to be depleted and programmes axed.
The DUP will protect our public services. We would not give our consent to the Sinn Fein cuts. We would act in a mature and responsible manner to avoid turmoil in our public services. We would exercise our veto.
The choice is now obvious and the options reduced to only one. The coalition government's proposal is being vetoed by Sinn Fein and Sinn Fein's preferred option will be vetoed by the DUP.
This leaves only the option of an improved system based on the GB model with agreed amendments similar to the set of proposals DUP and SF negotiators worked up more than 12 months ago.
If that package was good enough to be taken to the Sinn Fein decision-making body for approval then, how can they castigate those who support it now?
A refusal to move on this remaining proposal would be cruel, destructive and futile.
The penalties and costs which are presently causing a financial crisis and real hardship are for no purpose. Sinn Fein exercising a veto will not bring about the outcome they are advocating. They should end this farce now.
The present crisis is not the responsibility of the Executive parties, nor does it arise because the DUP and Sinn Fein can't agree. Sinn Fein alone has caused it and only Sinn Fein is stopping us from moving forward.
Now that Sinn Fein's option is off the table let's deal with reality and return to the only option that remains – the proposal we negotiated over a year ago.