UK Government

Office of the First Minister and deputy First Minister – in the Northern Ireland Assembly at 2:45 pm on 24th May 2010.

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Photo of David Hilditch David Hilditch DUP 2:45 pm, 24th May 2010

5. asked the First Minister and deputy First Minister what discussions have taken place with the new Government at Westminster. (AQO 1274/10)

Photo of Adrian McQuillan Adrian McQuillan DUP

9. asked the First Minister and deputy First Minister to outline the outcome of any meetings they have had with the new Prime Minister. (AQO 1278/10)

Photo of Peter Robinson Peter Robinson DUP

With your permission, Mr Speaker, I will answers questions 5 and 9 together.

The deputy First Minister and I spoke to the Prime Minister, David Cameron, immediately on his appointment, and we met him last Thursday during his visit to Northern Ireland. In the past week, we also held separate meetings with the Secretary of State, Owen Paterson, and the Northern Ireland Office Minister of State, Hugo Swire. During those discussions, we outlined the unique circumstances in Northern Ireland, including the need to address the historical imbalance between the public and private sectors and the link between economic stability and continued political progress. More specifically, we explored options for dealing with the announced public sector cuts; raised the issue of corporation tax; enquired about the publication date of the Saville report; and stressed the importance of finding a workable and speedy solution to the ongoing problems of the Presbyterian Mutual Society.

In response, the Prime Minister acknowledged the political progress that has been made here in recent years. He indicated that he wants to develop an impartial relationship with the devolved Administrations, based on the principles of what he describes as respect, and offered all three devolved Administrations the option of deferring cuts until the next financial year. That may seem an attractive option, but it would have implications for future Budgets and would require careful consideration by the Executive. He is also committed to producing a paper examining options for reducing corporation tax here, recognises the differences between each of the devolved regions and expressed a wish to use the Joint Ministerial Committee more effectively to address disagreements in an environment of mutual respect.

Photo of David Hilditch David Hilditch DUP

I thank the First Minister for his answer and the comprehensive list he has before him. Will the First Minister tell the House what the £6 billion of cuts will mean for the Northern Ireland block grant? How do the Executive intend to address that?

Photo of Peter Robinson Peter Robinson DUP

The Treasury provided the Department of Finance and Personnel with a communication today that indicates that the Barnett consequentials of those cuts will be £142·027 million. However, additions resulting from recycled savings amounting to £14·128 million must be factored into that figure, meaning there will be a net reduction of approximately £128 million. It will be for the Executive to determine the extent to which those reductions are applied during this financial year or are carried forward.

I am delighted that the Scottish and Welsh First Ministers are with us today. With them, we will seek a common approach that will give the devolved Administrations the widest flexibility in dealing with fiscal matters. Hopefully, that will include the ability to switch between capital and revenue and automatically draw down our EYF, both of which would be helpful in the current circumstances. However, we have not yet been given the division between the capital and resource departmental expenditure limits by the Treasury. Until those are announced, it is difficult for us to assess whether and by how much matters should be held over until the next financial year.

Photo of Adrian McQuillan Adrian McQuillan DUP

What does the Prime Minister intend to do about the plight of Presbyterian Mutual Society members?

Photo of Peter Robinson Peter Robinson DUP

During the election campaign, spokespersons for the Conservative Party indicated a high level of sympathy with the plight of the savers in the PMS. I raised that matter during the telephone call I had with the Prime Minister. The deputy First Minister and I also raised it when we met him recently, and he indicated that work is urgently going on in the Treasury. In the run-up to the election, we placed a proposal before the Treasury. That proposal was endorsed in principle by the Executive, but it requires some items to be cleared in relation to state aid from the EU and also requires the approval of the Treasury. We will continue to contact the new Administration in Westminster to see whether progress on those matters can be made as urgently as possible.

Photo of Daithí McKay Daithí McKay Sinn Féin

Go raibh maith agat, a Cheann Comhairle. It would be an understatement to say that there is a great deal of public concern about the cuts, the possible effect that they will have on our local economy and particularly the effect they will have on front line services. What will the Executive and the Office of the First Minister and deputy First Minister do to ensure that the cuts will not have an immediate short- to medium-term effect on front line services?

Photo of Peter Robinson Peter Robinson DUP

The prospect of £6 billion of Conservative and Ulster Unionist Party cuts strikes dread into many people in Northern Ireland, which relies heavily on the public sector. Furthermore, as we move forward into the much greater cuts that will arise from the CSR period, the Executive will have to take hard decisions. I agree with the Member that, given that we have little choice if cuts are imposed on us, we must do everything that we can to protect front line services. We need to remember that the option of simply cutting jobs out of the public sector will have an impact on recovery in Northern Ireland. The prospect of holding back on capital programmes will have an impact on the construction industry in particular. If we have recovered from the recession, jobs will be created in the private sector to offset any jobs that are lost, but they will be net losses if we were to take those cuts in the current financial year. The Executive will have to weigh up those types of issues.