Belfast Telegraph

The politics of crying babies throwing toys from the pram

By Liam Clarke

When we look back on this moment we may remember it as the instant when Edwin Poots lit the blue touch- paper which led to the implosion of the Northern Ireland Executive.

It is hard to see how Sinn Fein and the DUP will patch this one up without an election, or even after one. Governments here take a long time to restore once they have run out of credibility and the smaller parties see the difficulties between the bigger ones as an opportunity.

Politics is about wielding power and taking hard decisions to produce the best available outcomes for your voters.

It isn't about holding your breath or stamping your feet in the hope of getting everything you want. That is the politics of the kindergarten or the crèche where each time the babies throw their toys out of the high chair some responsible adults picks them up and gives the toddlers a cuddle.

That doesn't happen in the real world. If our politicians steer the devolved administration into a financial crisis it won't be so easy to repair the damage.

We are into uncharted waters but the biggest problem we face is the one identified by Wilkins Micawber to David Copperfield in Charles Dickens' novel. "Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery."

The books won't balance but people want to go on spending anyway, particularly on welfare, where we are currently implementing a system that is more expensive than the one being introduced in the UK. The difficulty with that is we are subsidised to the tune of several billion pounds each year by Westminster, so if we break our budget this year they can simply claw the money back from next year's payments.

The shortfall will be at least £87m next April and it will keep rising to £1bn over five years.

Sinn Fein's brave talk of facing down the Tories must be seen in that context.

In a sense Mr Poots is just the latest in a string of ministers who has said his department cannot live with the cuts which are being imposed on it to pay for welfare reform. The difference is that his Health Ministry accounts for nearly half of the entire Stormont budget – its spending is often literally a matter of life and death – and he is demanding an increase, not just resisting cuts.

When he says he cannot in conscience balance his books, that means that his budget will overshoot by anything from £60m to £140m. Other ministers will be tempted to follow suit.

Mr Poots has invited his Executive colleagues to agree the cuts collectively but that is unlikely to happen; trust levels are too low and we are deep into a blame game which can end in disaster.

There are a number of milestones along the way. In October we must agree another monitoring round to take us through the next three months. Mr Poots says he needs £60m more then. In January we need to start agreeing a budget for the next year and in April or May we must actually produce it.

At that point the Treasury will get very hard to deal with. They could cause difficulties even after retrieving the overspend. Refusing us end of year capital flexibilities could cost us tens of millions more.

What they aren't going to do is produce more money to reward intransigence – that would simply be impossible to sell in England where Treasury ministers actually get votes and the welfare reforms are going ahead.

The next move would be for each department's Civil Service accounting officer to start refusing to issue funds which weren't properly budgeted for. We are then well into Micawber territory.

Our equivalent to the debtors' prison, where Micawber ended up, would come when Stephen Peover, the Permanent Secretary of the Department of Finance, steps in. He would be legally obliged to intervene and empowered to impose budget cuts of 5% across the board. That would be £514m, equivalent to nearly the whole budget of the Department for Social Development.

If that happens, as one former minister put it to me, "how long the Executive can last depends on how much political embarrassment we can absorb".

Belfast Telegraph


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