Lord Hain:

Moved by Lord Hain

As an Amendment to the motion that the bill be now read a second time, at end insert “but this House regrets the continued failure of the political parties in Northern Ireland to agree to form an Executive; and calls on His Majesty’s Government to introduce legislation that introduces new rules for executive formation in Northern Ireland, such that any political party eligible to join a power-sharing Executive, but which refuses to do so, will have withheld from it (1) its Assembly party funding, (2) the salaries of its Members of the Legislative Assembly (MLAs), (3) the salaries of its MLAs’ staff, and (4) MLA office and travel expenses”.

My Lords, I particularly welcome that the noble Lord, Lord Empey, is in his seat. I wish him and his family all the best. I thank the Minister for moving Second Reading. I fully support his Bill in these circumstances.

This Amendment is procedurally unusual and puts down a marker only in order to highlight a deeply troubling gridlock in Northern Ireland’s self-governance that is relentlessly ravaging the very foundations of the Good Friday agreement. From 2007, when a settlement I helped to negotiate under Tony Blair brought the unlikely duo of Ian Paisley senior and Martin McGuinness to share power, there was a decade of DUP/Sinn Féin- led self-government as stable as Northern Ireland was ever likely to get. That was then collapsed by Sinn Féin for three years. Now, post Brexit, Stormont has again been collapsed, this time by the DUP, for over a year. I hope that the current UK-EU negotiations over the protocol will resolve that, but I am not sure they will.

Meanwhile, public support for the carefully negotiated system of self-government is in danger of collapsing completely in the midst of the worst cost of living crisis for generations, the NHS in Northern Ireland facing a worse crisis than anywhere else in the United Kingdom—costing lives—and other manifestations of dysfunctional public administration causing serious problems.

This amendment does not point fingers or apportion blame. Any political party has a right to refuse to serve and to use that as leverage. The problem is that the political architecture necessary to achieve the Good Friday peace accord requires cross-party government, so a refusal to serve collapses everything and amounts to a veto. There has to be a cost for doing that, and my amendment would impose one, not so much as a penalty but more as a deterrent.

I fully understand why the DUP believes it was betrayed by Boris Johnson and the noble Lord, Lord Frost. No doubt Sinn Féin believes it had good grounds for collapsing Stormont in January 2017. But this amendment stipulates that, if any party did that in the future, it would lose the millions of pounds that come with doing the jobs that the vast Majority of the electorate in Northern Ireland rightly expect it to do. At current levels, that would total over £5 million for the DUP alone and a similar share for Sinn Féin. I urge the Government to consider legislation to that effect.

A situation in which one party or another can simply walk away and paralyse Northern Ireland’s self-governance because it does not get its way is anti- democratic. This issue will have to be addressed by the Government if the devolution settlement, which was so hard won, is to survive. I urge the Minister and his colleagues in the Cabinet seriously to consider this. I beg to move, although I will not seek to divide the House at the end of the debate.

My Lords, I will speak to my Amendment to the Motion and make some more general comments about the budget the Minister has brought forward. I join with the noble Lord, Lord Hain, in his remarks about the noble Lord, Lord Empey, and his family. I offer him our best wishes at this time.

It is important to remember how we got to this sad point, because we certainly believe that the budget for Northern Ireland should be set in the Northern Ireland Assembly in Stormont. It is a matter of deep regret that we find ourselves in this position this evening because the Government brought forward the Northern Ireland protocol and continue to implement it, albeit with significant grace periods and other measures that have not been fully implemented.

For the purpose of context, we should remember that, when the Executive ceased to function in Northern Ireland, the Sinn Féin Finance Minister, Conor Murphy, had been working on a budget from October 2021 to the spring of 2022. When he brought forward a budget, he failed to find any other party in the Northern Ireland Executive, which discussed the matter, to agree to it. So nobody should run away with the idea that having the Executive and the Assembly back will lead to some kind of wonderful outcome as far as the budget is concerned, because Sinn Féin brought forward a budget which was rejected by all the other parties—that was the state of play when the Assembly and the Executive finished. I remind your Lordships that at the start of 2017, Sinn Féin again held the Finance Minister position and the then Minister and his colleagues collapsed the Assembly and the Executive and refused to bring forward a budget for Northern Ireland, even though we were facing a very short timescale. It is important for context that your Lordships are aware of those points.

On the amendment to the Motion in the name of the noble Lord, Lord Hain, I fail to recall that any such amendment was brought forward at any point during the three years when Sinn Féin collapsed the Executive. Indeed, I asked the Library to check how many vociferous statements had been made by members of the Northern Ireland Affairs Committee, Northern Ireland spokespersons, people who take an interest in Northern Ireland, and Front-Bench spokespersons, and I found very few examples of them being prepared to come out and say, “Sinn Féin is at fault for the collapse of the Assembly”, or to seek any kind of punishment or redress. Instead, it was dressed up in all sorts of talk about the parties needing to come together. So it is interesting—and it will not be lost on unionists in Northern Ireland—that we have this approach to unionist parties, at a time when unionists are making the point that they cannot operate a protocol which is injurious to the union, the very thing we are there to defend and promote. The purpose or import of the amendment to the Motion would be, in effect, to expel a party from the political process: it would have no resources for offices, no staff and no salaries—nothing.

It is interesting, again, that when Sinn Féin refused to take their seats in the other place, extraordinary efforts were made to ensure that they received all the benefits of office, including salaries and staff. They even get a parliamentary allowance; it is not Short money, but it is actually looser than Short money and can be spent on all sorts of political promotion, courtesy of the UK taxpayer. Not a word is said about any of that; there is silence. That too is not lost on unionists.

The fundamental reason we are in this position this evening is the Northern Ireland protocol. The Minister said that he was disappointed about the lack of a functioning Executive, but I thought he would have mentioned the protocol and the disappointment we all feel in the unionist community in Northern Ireland—and, indeed, people beyond that—at the damage done by the protocol over the last few years. To suggest that we should now, in effect, expel parties—including the main unionist party—from the political process in Northern Ireland, which is the real import of the suggestion of the noble Lord, Lord Hain, is a fundamental rewriting of the Belfast agreement. We are that told that it is important to have all these safeguards for the agreement, but the very things that are now being suggested are completely undermining any basis on which the Belfast agreement, as amended by St Andrews, is predicated. People talk about protecting the Belfast agreement, but they are quite happy to jettison at the first opportunity the fundamental requirements of the agreement when it suits them. When the rules come up with a result they do not like, they then change the rules. Yet we are told that the protocol is necessary to protect the agreement.

I have set out in the amendment to the Motion the reasons why the Bill is, unfortunately, necessary and why the Northern Ireland protocol, in our view, has to be replaced. It is incompatible with the Belfast agreement, as amended by St Andrews; it breaches the principle of consent; it undermines the three-strand approach of the political process in Northern Ireland, which has been the basis of people’s approach to the Northern Ireland situation for many years; and it undermines the cross-community voting mechanism. The idea that we have any kind of democratic consent in the Northern Ireland Assembly to the protocol, many years after it was implemented, but only on the basis of a Majority vote—the only vote of any significance, which cannot be held without a consensus, or which is capable of being turned into a consensus with a cross-community vote—again undermines the agreement. It is undemocratic.

It is important to spell this out, because anyone listening to this debate, having heard the Minister outline the position, would think, “It is all just some arcane dispute between the Northern Ireland parties in Belfast; if only they would get their act together”, but it is far more fundamental than that. The Northern Ireland Assembly, if restored, will be denuded of powers to legislate over vast swathes of the economy: agri-food, manufactured goods and so on. VAT will be applied differently in Northern Ireland from the rest of the UK. We have already seen some of the outworking of that in the Budget Statement by the former Chancellor, now Prime Minister. State aid rules are applied completely differently, as we are under the EU regime. What self-respecting elected representative of the Northern Ireland Assembly, of whichever party, wants to celebrate and argue for a situation where they are deprived of the ability to make Laws in over 300 areas of legislation that, rightfully, are mainly devolved to the Northern Ireland Assembly, but reserved to Parliament in some cases? It defies logic, it is not democratic and it is contrary to the New Decade, New Approach agreement, the basis on which the devolution settlement was restored in 2020 and which committed to the restoration of the United Kingdom internal market.

As has been illustrated in the court action taken by the noble Baroness, Lady Hoey, among others, the protocol has breached the Acts of Union themselves. Of course, we will no doubt hear more about that tomorrow in the Supreme Court. The Government have vigorously defended the argument that the Acts of Union have been subsumed or derogated from to accommodate the Northern Ireland protocol.

For all those reasons, unionists who have any concern whatever for the future of Northern Ireland, or indeed anyone who is concerned with democracy and the betterment of the people of Northern Ireland, should have concerns about the protocol. Over many months before the Executive ceased to function, when the Democratic Unionist Party actually held the position of First Minister, we warned that we were coming to the point where we had to have some progress on these issues—and eventually that came to a head, as we know. Other noble Lords will no doubt talk about the costs of the trader support services, the digital assistance scheme and the movement assistance scheme, and all that. Taxpayers are paying out almost half a billion pounds—£500 million—and that is purely taxpayers’ support to help people fill in forms digitally, and all the rest of it. That sum could be in this budget, but it has been diverted to deal with the complications of the protocol. That is before adding in the costs to business and all that—and those of us who sit on the Protocol on Ireland/Northern Ireland Select Committee will have heard from companies such as Marks & Spencer, which has spent up to £30 million setting up facilities for moving goods to Northern Ireland. That is just one company. These are extraordinary amounts of money—£500 million on that alone will go a long way to helping some of the problems that we have in Northern Ireland with education, health, policing and so on.

I hope sincerely that we can make real, significant progress towards finding a solution to the protocol problem. The Government have laid out their position in the Command Paper of July 2021, and the Explanatory Memorandum for the protocol Bill said very clearly what needed to be done to have a permanent, sustainable solution. I hope that the Government will hold firm to those commitments. They were not made by the DUP; they were not tests set by us. These were statements made by the Government of what needed to be done, and they cannot easily be put forward and then retracted. Indeed, the current Prime Minister, Rishi Sunak, when he came to Belfast, at a meeting in Bangor when he was running for the leadership, committed to the objectives of the protocol Bill. We will measure what comes out of the talks against those commitments and against our seven tests.

If we are hearing, as we seem to be, that we will be left in a situation going forward where we will still be under EU jurisdiction and EU laws, with the oversight of the European Court of Justice at arm’s length, or whatever it is, that gross breach of sovereignty, as I have already outlined, will be something that unionists cannot accept. We are entitled to be part of the United Kingdom, to have our laws made by our elected representatives and to have internal trade of the United Kingdom flow freely between all parts of the United Kingdom. So we have to have something that will work, going forward.

Some of the talk about green lanes and red lanes and all the rest of it means different things to different people. It seems to us that it is very much based on the proposals put forward by the European Union last October. It could be that it has moved on from that—but we should remember that, even if we solve the issue of red and green lanes and all that, it does not get to the heart of the problem of the differences in terms of divergence and diversion of trade, and the problems that will exist if you have a lot of the laws of Northern Ireland being made by a foreign political entity in its interests, and not in the interests of Northern Ireland, and with no say or vote by anyone in Northern Ireland. That cannot be sustainable going forward.

If we find ourselves in a position whereby the Government do not hold fast to their stated position and the commitments that they have made to the people of Northern Ireland and that they have made about the sovereignty of the United Kingdom and the free flow of trade within the UK internal market, we will be in a position of looking to the longer term governance of Northern Ireland without an Assembly and an Executive. That is unfortunate, but it will be the reality of the situation.

There may be attempts, as we have heard already, to chuck out the Belfast agreement, St Andrews and all the rest of it. I would suggest that that is a very dangerous course to embark on—a very dangerous course to embark on. We need to work to try to restore those institutions, but on the basis of agreements that are already there. As we heard previously from the Dispatch Box and on the front bench, the only means of making changes to the current arrangements is by a sufficient consensus of unionists and nationalists to make those changes, and anyone who suggests that you breach that fundamental principle of political decision-making and institution-making in Northern Ireland is going down a very dangerous path, as I said.

So what should happen? We cannot have a return to the situation where, over a long period, civil servants are left to run Northern Ireland, even with so-called guidance. We cannot have years of stasis with no political guidance. This is the Parliament of the United Kingdom. Ministers in His Majesty’s Government are responsible for the good governance of Northern Ireland. Indeed, I think that those words were part of a previous election manifesto commitment of the Conservative Party, where it was made clear that, in the absence of devolution, it is the responsibility of the Westminster Government to make decisions—decisions that will be accountable, whereby we can question and query and hold Ministers to account. Civil servants cannot be put in that position; it is unfair to them and to the people of Northern Ireland.

The choice is not between having no Executive and therefore no Government. There is an alternative—we can have government—and it is up to the Government here to take on that responsibility. I have to say that some people may say that that means that there is decision-making from London as opposed to Belfast, but, over recent times we are already seeing a constant working against the devolved settlement, in any case. We have seen it with abortion regulations and with the legacy proposals, and we have seen it with changing the voting mechanism for the protocol. We have seen it most recently in relation to the statutory instrument due to be brought forward soon in relation to border control posts. All those are devolved issues, yet the Government decided to intervene. So they are already doing it, but it seems that they pick and choose which areas to override the devolved settlement on. So what I am saying is that we cannot go back to the situation where civil servants are running Northern Ireland; we have to have a situation where there are accountable Ministers, if not at Stormont then here.

It is important that these matters are explored in detail, and they have to be explored in this House in this Parliament by the representatives of the people of Northern Ireland.

My Lords, first I offer my support and the support of these Benches to the noble Lord, Lord Empey, Lady Stella and the family at this time.

The debate on the Second Reading of the budget Bill should be happening in the Northern Ireland Executive and Assembly following approval in the Executive; it should not be happening here. But I suppose those words are self-evident. All parties in Northern Ireland have to take devolution and power sharing seriously and see it as a duty and obligation to represent everyone on a fair and equal basis. I support this Bill as it deals with the financial necessity for the people of Northern Ireland. Other necessities have already been referred to, along with the positive outcome required to the UK/EU negotiations on the protocol and the restoration of our political institutions.

There is no doubt that we in Northern Ireland face challenging political circumstances, where the political institutions to which people have been elected are lying dormant due—and I say this in the kindest possible way—to the disproportionate Opposition from the DUP over the protocol to the hurt that is being caused.

Reference has already been made to the fact that this is not the first time the institutions have lain dormant: it happened in 2017, when Sinn Féin brought down the institutions. Again, that was disproportionate and unacceptable. Both actions do nothing to assist the body politic or communities in Northern Ireland which are facing a constant, piercing cost of living crisis, as is characterised by the budget under debate this evening. They have ongoing problems with health waiting lists and inadequate funding for our police and education services. Nobody is served by the policies of abstentionism, as currently practised by the DUP in the Assembly, by Sinn Féin previously in the Assembly and by Sinn Féin in the other place. I believe that no political principle is worth withholding participation in democratic institutions or not allowing them to function properly.

My noble friend Lord Hain’s Amendment reflects in many ways the frustration, anxiety and weariness of many people and communities throughout Northern Ireland about the lack of political institutions operating to their full potential. The amendment of the noble Lord, Lord Dodds, as I thought it would, reflects the DUP’s opposition to the protocol. I just gently say that the DUP, along with the ERG, supported a hard Brexit which the people of Northern Ireland did not vote for. The Majority voted to remain within the EU, the protocol is a consequence of Brexit, and the problems emerged on leaving the European Union. But let us leave that aside, because we could cast lots across the Chamber about the benefits and disbenefits of the protocol.

I know the Minister met with the dairy industry in Newtownards and was given presentations by Dr Mike Johnston and senior representatives of Lakeland Dairies. They showed quite clearly, as they showed me when I met them back in November, the benefits and difficulties and challenges presented by the protocol Bill. When members of the protocol sub-committee were in Newry and Belfast, we heard evidence in Newry about how it benefits, in a financial way, the cross-border economy, while we heard evidence in Belfast from the haulage industry about the problems and challenges of the protocol, but I hope that those challenges and difficulties are currently the subject of negotiations. I ask the Minister to provide us with a little update on those negotiations: are they in the tunnel or near the landing zone? I hope they will lead to a resolution of the current difficulties and a restoration of the institutions.

But we are dealing with a budget Bill and we have strange political circumstances: we have an indirect form of direct rule. The budget is for this financial year, which will expire in four or five weeks, and Permanent Secretaries are facing funding decisions within their own departments over spending priorities. The budget is being set by a Conservative Party, despite little electoral support in the region, because of the political circumstances of Northern Ireland. While the Bill includes a vote on account for the upcoming financial year, it does not provide clarity on the resources that Northern Ireland departments will have available over the next financial year, which is just a short time away. Undoubtedly this leads to an inability to plan, which has significant implications for the delivery of public services.

For example, the Department of Health does not have the necessary confidence and clarity to invest in staffing teams to help deal with waiting lists, which are some of the worst in the UK. Many people in Northern Ireland, and maybe some in your Lordships’ House, are waiting to access those waiting lists for surgical and other types of medical, clinical procedures. As we discuss the budget, it is worth remembering that the UK is the only nation in the G7 whose economy will shrink in 2022-23, according to the International Monetary Fund. Have the Government any reason for this? Has the analysis carried out by the IMF been shared by the Treasury with the Northern Ireland Office?

I will take a little snapshot on health. Spending on the transformation of the ambulance service is urgently required. GPs are facing an existential crisis: they are doing more and more work to ease the pressure on our hospitals, but there is not the money to enable them to do so. Mental health figures for Northern Ireland are some of the worst in the UK and Ireland, some of which is attributed to the legacy of the Troubles. A commissioner has been appointed to deal with this and he developed a strategy, but now the plan cannot be funded. An above-inflation pay increase is required for our nurses and, as far as I know, nurses in Northern Ireland of comparable grades, qualifications and training receive less in their salaries than those in the same categories here in Britain.

I support the Bill. I deeply regret that we find ourselves in circumstances where we are discussing these issues. I hope there is a resolution to the protocol negotiations and a restoration of political institutions that will enable people who are elected by the people of Northern Ireland to the Assembly to form an Executive, to make recommendations around that executive table for budget allocations and for the Assembly to debate and agree the Bill, which would be given detailed scrutiny in committee and on the floor of the chamber. I just regret that we are discussing this, not the people whom we elect to do it on our behalf in Northern Ireland.