Welfare Reform

Oral Answers to Questions – in the Northern Ireland Assembly at 2:15 pm on 17th February 2014.

Alert me about debates like this

Photo of Fra McCann Fra McCann Sinn Féin 2:15 pm, 17th February 2014

1. asked the Minister of Finance and Personnel to confirm that DSD has estimated that £450 million will come out of the local economy if welfare reform is implemented. (AQT 721/11-15)

Photo of Simon Hamilton Simon Hamilton DUP 2:30 pm, 17th February 2014

I am not particularly versed in DSD's precise estimate of what will come out of the economy as a result of welfare reform.  Many people in Northern Ireland will benefit from welfare reform as a result of the move to universal credit, and a significant number will be better off.  As happens with any changes or reforms, there are always winners and losers.  However, the Member will know that, as I made perfectly clear not just in responses to earlier questions but very publicly in the media and in the House last week, we have to balance the impact of the money that is lost as a result of welfare reform with the significant amount that will be lost to the Northern Ireland economy and to our ability as an Assembly to spend money on public services that are needed by our citizens.

The Member and I go back a long time in looking at welfare reform, and he will remember the previous set of reforms, which were a bit of a teddy bears' picnic compared to the current ones.  He will have to appreciate, as I am sure will others, that the impact of taking £1 billion out of our Budget over the next five years will affect some seriously vulnerable people in Northern Ireland society.

That does not take into account the impact of the cost of a replacement IT system.  If we step away from parity with the rest of the United Kingdom, we will have to replace that system, the cost of which is estimated at £1·6 billion over the next 10 years.  Then, there is the very real concern that, even in procuring a very expensive IT system of our own, it will take until beyond 2016 to put it in place.  The ramifications of that are that many people, including 200,000 working families in Northern Ireland, will not receive the benefits to which they are entitled post-2016.

Photo of Fra McCann Fra McCann Sinn Féin

Go raibh míle maith agat, a Cheann Comhairle.  I thank the Minister for his answer.  I do not recognise the figures he mentioned; they have materialised only in the past few weeks.  Rather than being a reform agenda, this is a cuts agenda.  The British Government have already said that they want a 20% reduction in the benefit bill.

Photo of William Hay William Hay Speaker

I encourage the Member to finish.

Photo of Fra McCann Fra McCann Sinn Féin

It is more likely to hit those who are most marginalised in society, such as low earners.  Would it not be better if we stood together, as a House, and went to the British Government to say enough is enough?

Photo of William Hay William Hay Speaker

I must insist that the Member now brings his remarks to a close.

Photo of Fra McCann Fra McCann Sinn Féin

Let us get a system that benefits —

Photo of Fra McCann Fra McCann Sinn Féin

— the people rather than having cuts.

Photo of Simon Hamilton Simon Hamilton DUP

I think that there was maybe a question in there somewhere; there was a why or a where or something.

I remind the Member that, whatever the estimates — he mentioned £450 million, and I have seen a figure of £750 million being put forward by others — that is not money that is being taken out of the economy.  It is the amount less that we will have to spend on welfare in Northern Ireland.  The overall global picture of welfare spending in Northern Ireland will continue to increase post-welfare reform.  If we take the Member's figure, it is £450 million less than we might have expected as opposed to a net loss of £450 million.

Thinking back to figures that I saw 12 to 18 months ago, social security expenditure in Northern Ireland was anticipated to rise towards the end of the decade by roughly 20% as a result of the reductions that will come through from welfare reform; that will be roughly 17%.  However, whether it is 20% or 17%, there will still be a net increase in welfare expenditure in Northern Ireland.  There will not be a reduction.

As I said, in a situation where it might not be nice to see that amount of money not going into the Northern Ireland economy, we will sure as hell feel the impact of £1 billion being taken out of our ability to spend over the next five years.  The Member said that he does not recognise the figures that I have put out, but he will start to recognise them when we see cuts to every single Department — every single Department.  I will have no option but to bring forward a paper to Executive colleagues outlining how I think we should best reduce our expenditure across all Departments by £105 million next year. [Interruption.]

Photo of Simon Hamilton Simon Hamilton DUP

I will really not look forward in a few years' time to taking over £300 million out of expenditure by Departments here in Northern Ireland.  The impact of that will hit the very vulnerable people whom, I believe, the Member is trying to protect.  Those same vulnerable people will be affected exceptionally negatively by cuts in housing, health, education and other sectors.