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PM 'reneging on peace dividend'


Martin McGuinness

Martin McGuinness

Martin McGuinness

David Cameron is reneging on a British Government deal to give Northern Ireland a "peace dividend" for another three years which was struck during early peace-building negotiations, Martin McGuinness has said.

As a split in Belfast's power-sharing Executive over the Government's welfare reforms threatens to collapse it, the Deputy First Minister accused Westminster of going back on an agreement done with Tony Blair.

Mr McGuinness said both his own Sinn Fein and the Democratic Unionist Party had agreed with the then prime minister during earlier stages in the peace process that there would be a "peace dividend" up until 2018.

"As far as I'm concerned the cuts that are being foisted on our executive now are a rescindment of that commitment by this British government," he said.

Mr McGuinness was speaking at a summit of political leaders from both sides of the border in Ireland, the North South Ministerial Council, which was set up under the Good Friday Agreement.

"I think with a good will on all sides we can bring the British Government to appreciate the fact that what is happening in Northern Ireland - with a society emerging from conflict - is different from what's happening everywhere else," he said.

"That needs to be recognised and needs to be supported.

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"Because the people who have suffered as result of the conflict need to benefit from the future peace."

An ongoing impasse over the introduction of the UK Government's welfare reforms in Northern Ireland, and the resultant stalling of the landmark Stormont House Agreement political deal, has pushed the five-party coalition Executive toward the edge of a financial precipice.

The defeat of the Welfare Reform Bill in the Assembly last week, due to a Sinn Fein/SDLP veto, has endangered other elements of the agreement, such as the devolution of corporation tax powers, access to £2 billion of increased borrowing powers from the Treasury, a major civil service redundancy scheme and new structures to address the legacy of the Troubles.

The future of powersharing essentially hangs on the fate of the agreement, with the failure to implement it having left the Executive facing a reputed £604 million funding gap this financial year.

Treasury penalties for non-implementation of welfare reforms, currently running at just under £10 million per month, and inability to access the funds to pay for the already established redundancy scheme in part explain the black hole in the budget.

If Executive ministers fail to set an agreed budget to implement the multi-million pound cuts in the second half of the financial year then a senior civil servant will be forced to take over departmental purse strings at the end of July.

But that individual will be subject to tighter spending restraints than Executive ministers, which will mean even more funding will be cut from public services. The DUP estimate a total of £2.8 billion will be cut if that scenario plays out, though Sinn Fein claim the amount is much smaller.

In a bid to break the deadlock, the DUP intends to propose an unfunded budget next week. This spending plan, dubbed by some as a "fantasy budget", will be based on the assumption that the Stormont House Agreement has actually been implemented and therefore will not factor in the £604 million shortfall.

The party hopes the initiative will either push Sinn Fein and the SDLP to think again on welfare, or prompt the UK Government to intervene directly, potentially to implement welfare over the heads of the Assembly.

The DUP Finance Minister Arlene Foster insisted the so-called fantasy budget was not a time-buying exercise.

"Frankly I'm not interested in buying time," she said.

"I'm interesting in getting a resolution to the difficulties we find ourselves in."

She said the budget will be brought forward next week when negotiations will begin.

Sinn Fein and the SDLP vetoed the welfare reforms because they claim they will hit the most vulnerable in society.

The Government has insisted the welfare reforms are necessary, and must be introduced if the rest of the Stormont House Agreement is to be implemented.

While initially backing the welfare element of the Stormont House Agreement, Sinn Fein withdrew its support three months later, claiming that Executive-funded top-up measures to support claimants losing out under the new system were not as comprehensive as it believed were envisaged in the accord.

The DUP has accused its main partners in powersharing of welching on the deal.

Also speaking at the North South Ministerial Council in Dublin Castle, Taoiseach Enda Kenny said no-one wanted to see the Stormont executive collapse.

Mr Kenny said he would raise the current crisis with Mr Cameron in a summit on June 18.

The premier said there was an agreement in place, it was welcomed at the time and that it now needs "creativity and imagination" to push it over the line.

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