Belfast Telegraph

Welfare reform row: Theresa Villiers warns Stormont there'll be no Westminster bailout

By Liam Clarke

The Secretary of State has issued a blunt warning to local politicians – Westminster will not bail you out over welfare reform.

In an interview with the Belfast Telegraph Theresa Villiers insisted that the Westminster Government will do nothing to lessen the financial impact if the Executive fails to implement the UK-wide reforms.

She also called for new talks on flags, parading and the past, and said she was hopeful powers to vary corporation tax will be devolved to Northern Ireland.

She is currently pushing forward the idea of a special process to look at parading in north Belfast, first mooted in this paper.

The benefit reforms already introduced in England and Wales will reduce the rate of increase in welfare spending here and Sinn Fein has so far blocked their implementation, retaining the old, more expensive system.

As a result the Treasury is deducting money from our annual block grant and this is forcing cuts in other local departments.

Sinn Fein and the SDLP argue that if the Executive presents a united front it can get a better deal from Westminster. Ms Villiers specifically rejected that on behalf of the Government.

"The outcome of welfare reform being blocked by the nationalist parties is that Northern Ireland is going to be spending money on a more expensive welfare system, leaving less to spend on other very important priorities like the NHS and the police. That worries me, but the UK Government is not prepared to go any further" she said.

"Northern Ireland can run its own welfare system if it wants to, but it needs to find the money itself to fund it.

"It is the Government's position that we have gone as far as we can on flexibilities for Northern Ireland. There isn't any further funding on the table."

In her first interview since returning from the summer break, Ms Villiers promised to hit the ground running and to hold meetings with the local political parties, starting on September 8.

Next week she will be giving evidence to the issue of on-the-runs (OTRs) at the Northern Ireland Affairs Committee in Westminster.

"The two big obstacles to progress at the moment are the implementation of welfare reform and trying to restart the cross- party talks on the legacy issues of flags, parading and the past. Those are the two issues which I will be focusing on strongly" she said.

She added: "My priority is to get the unionists back to the table on cross-party talks."

The talks broke down earlier this year when unionists pulled out over the issue of OTR letters. First MInister Peter Robinson demanded a judge-led inquiry into the letters of comfort assuring OTR terrorist suspects that they were no longer wanted. That inquiry, led by Lady Justice Hallett, has now reported.

The Secretary of State warned that failure to resolve problematic issues such as welfare reform and the legacy issues would poison relations in the Executive and threaten economic recovery.

She stated: "The parties need to focus strongly on those issues. There is real good news for Northern Ireland at the moment in terms of the economy – with good growth figures and unemployment coming down for 19 months in a row – but political instability is a potential deterrent to inward investment."

Turning to the issue of parading, she said that there was a need to look at the special issue of north Belfast.

There is an annual standoff when Ligoniel Orange lodges are prevented by a Parades Commission determination from marching past Ardoyne shops on the Twelfth of July evening.

In July this newspaper proposed a special commission to look at the issue, test opinion and make recommendations. This was taken up by unionists but rejected by nationalists, who feared that it would undermine the Parades Commission. However, a similar proposal was contained in the Parades Commission determination restricting the Ardoyne parade.

"This idea is still very much in play," she said: "The Parades Commission in their determination called for a more structured and cohesive approach to north Belfast. So I think even if the unionist leadership hadn't put the proposal forward, and even if the Belfast Telegraph hadn't called for it, I would be pursuing it."

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