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Budget Bill: Second Stage

Executive Committee Business – in the Northern Ireland Assembly at 3:30 pm on 16th February 2015.

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Debate resumed on motion:

That the Second Stage of the Budget Bill [NIA Bill 45/11-16] be agreed.

Photo of Jo-Anne Dobson Jo-Anne Dobson UUP

I welcome the opportunity to speak on the Budget Bill. I will split my remarks into two sections to broadly reflect what the Bill is seeking us to approve. First, I will look back at the year that has been, and, secondly, I will look at the year that now looks likely.

There is no doubt that 2014-15 was an immensely challenging year. The institutions faced one crisis after the other; in fact, they came close to what looked like a likely collapse on more than one occasion. The lack of political control at the top of the Executive was, unfortunately, repeated in a lack of control on their financial management. Of course, I am talking about the 4·4% in-year reduction that 10 of the 12 Departments were hit with, simply to keep key public services operating. There were a number of reasons for that, not least the ridiculous spectacle of the £87 million penalty that was paid to the Treasury. That, along with £13 million the year before, was money that the Executive could ill afford to lose, yet it did — all because one party walked itself into a corner for fearing what the voters of the Republic would think, only to, very publicly, roll over at the last minute, because after playing and losing their one and only card with the Prime Minister, they knew they had no other ideas or options left. Nevertheless, if some in the Chamber had had their way — I look to the Minister's party for this — they would have had all of us believe that all the in-year reductions were to pay for the fines. In reality, the majority was required to smooth over the deep and dangerous cracks that were appearing in the 2011-15 Budget. Some parties quite clearly decided to place political spin far ahead of being honest with the public.

Of course, the four-year Budget was always more of a calculated political agreement than any sort of genuine attempt to use public funds appropriately. The last Assembly was assured in late 2010 and early 2011 that the numbers worked and that those individuals or parties with even the slightest bit of doubt would be proven wrong.

This was the year that the Budget deal finally fragmented beyond all recognition of what was agreed almost four years ago. We need only look today at how different the final settlements were to those agreed. In fact, I ask the Minister if there has ever been a year with such in-year shifts of departmental budgets. It is not about scoring points, Mr Speaker. I am simply saying that it is about time that we had a little bit of honesty around what happened between early summer and autumn last year.

As my party's health spokesperson, I will make a few specific points with regard to the Department of Health's year.

Photo of Paul Girvan Paul Girvan DUP

Will the Member give way?

Photo of Paul Girvan Paul Girvan DUP

Would it not be right to state that one of the biggest areas in which there was a difference was the capital end of things? It was in relation to your Minister, his reluctance to deliver the A5 and how that had to be dealt with.

Photo of Jo-Anne Dobson Jo-Anne Dobson UUP

I thank the Member for his intervention, but I will move on.

As we are all aware of the fact that the Department ended with a £13 million deficit in 2013-14, despite receiving a further £100 million in monitoring rounds that year, it was clear that all was not well within our local health service even before this year had started. That deficit, however, turned out to be a relatively small problem for the Department, as its financial prognosis kept going from bad to worse. Only in late August 2014 did the then Minister gather the political confidence to accept that he had made a mistake and that the numbers in the 2011-15 settlement, which he and others had praised for so long, did not add up. He need not have warned about refusing to implement cuts, because, not long after his statement, he was unceremoniously out of office.

In my opinion, mistakes were made. It is unforgivable that the Minister and his officials waited so long to ring the alarm bells. They knew, by waiting well into the last year of a four-year budget, that it would be all but impossible to reallocate emergency funding without having a major and damaging impact on other areas. Had they spoken up earlier — the former Minister is responsible here — much of the pain could have been avoided. However, aside from a half-hearted attempt at TYC, nothing was done to avoid what happened this year. The Minister simply sat back and watched the local national health service walk into a major funding crisis. Whilst the Department eventually received significant in-year allocations, even still, they were either not enough or, more likely, came too late to mitigate all the damage that had been done. The decisions of each of the five health trusts are well known and do not need to be repeated here today. I stress, however, that decisions to scale back domiciliary care, to close minor injury units and to slash intermediate beds not only go against nearly every policy that the Department is meant to have but show an astonishing lack of financial insight. I have said this in the Chamber before: short-term gains for much, much longer-term pain.

As our health service prepares to turn from 2014-15 and looks ahead to 2015-16, the horizon, sadly, looks even worse. This will inevitably start to become clear in the few months between now and the Estimates in June. Whilst the budget settlement for next year included an additional allocation of over £150 million, that is entirely offset by £220 million of pressures being carried forward from 2014-15. In fact, the Health Department is forecasting its pressure increasing to £317 million, up again from £304 million this year. In addition, I note that the Department believes that it has identified savings opportunities and cost reductions of £164 million. Of that, the vast majority — £113 million — will come in the form of cash-releasing efficiencies and productivity gains in trusts.

In the absence of any new approach to organise our health service, I simply do not believe that all those savings from the trusts will be attainable. Whilst the Vote on Account is crucial to keep the service ticking along until the Main Estimates later in the year, if we are heading for another funding crisis in our health service, we should be preparing for it now, not in October. I hope that the new controls that the Executive and the Finance Minister have over the Department of Health spend, as unprecedented as they may be, will ensure that the scene last year on 21 August, when the former Minister set out his belated request for extra urgent funds on the radio, will not be repeated.

As we are in the process of granting permission for a large proportion of next year's spend, I want to turn to the specific issue of what has already been termed in the House as "the forgotten service": the Northern Ireland Fire and Rescue Service. The Minister will be more than aware of the concerns amongst Fire Service management and staff that they are, for some reason, not viewed by government as a front-line emergency service. Maybe that is because the Health Department does not have a definition of a front-line service, so I will take the opportunity today to ask the Finance Minister. His press release of 19 January talked about a Budget for next year:

"Supports frontline public services and economic growth".

However, it is a Budget that does not support the Northern Ireland Fire and Rescue Service. I assure the Minister that it is, indeed, viewed as a front-line emergency service by the general public, and rightly so. It is often first on the scene of some of our most horrific and life-threatening incidents. Its responses are time critical, and its dedication and training should be supported to the hilt by government. Personnel put their life on the line for everyone and should not be in any way hampered from doing what they are fully trained to do best: save lives.

Recently, I visited those who hold the front line of the Fire Service at Portadown fire station. I wanted to hear first-hand what was being proposed and how it would affect them and the service that they provide. I met an extremely dedicated bunch of individuals who care deeply for their community and feel that their voice is not being listened to when it comes to the Budget. They are the experts with the experience and knowledge, and their voices should be heard.

I know, having also spoken to Fire Service management, that they will continue to work to deliver greater efficiencies within the service. However, the proposed reduction in their budget of just under 10% forces decisions upon them, rather than allowing them to make changes and efficiencies that would not threaten the life-saving front-line service that they provide. I would be grateful if the Minister considered the current position of the Northern Ireland Fire and Rescue Service relative to its sister services in England and Wales, which plan their budget for the next five years. In Northern Ireland, because of the lack of detail, Fire Service management are unable to plan their budget for even the next 12 months with any certainty. Minister, urgent clarification is required. At this stage, we do not care who gives it to them — you or Minister Wells.

The men and women of the Northern Ireland Fire and Rescue Service, just like our medical staff and security services, are front-line emergency services and should be viewed in that way by government. Failure to do so is not only disrespectful to dedicated men and women who put their lives on the line daily, it is dangerous because it has the potential to lengthen response times and put lives at risk.

I have nothing but admiration for the firefighters whom I met in Portadown and for firefighters across Northern Ireland. I urge the two Ministers to look again at this forgotten service before it is too late.

Photo of Christopher Hazzard Christopher Hazzard Sinn Féin

Go raibh maith agat, a Cheann Comhairle. I welcome the opportunity to speak in the debate. I welcome the fact that the central pillars of the Budget for 2015-16 are the protection of key front-line health and education services; investment to support economic development; and putting in place the foundations of the reform and restructuring of our public sector agreed as part of the Stormont House Agreement.

Sinn Féin will continue to provide security to public-sector workers through its policy of no compulsory redundancies. We place delivery in health and education at the very heart of our economy. Let us be very clear: the health service is a vital service that all of us will rely on at some stage in life, and it is, therefore, vital to protect investment in it. However, we need the Minister to get to grips with the financial department in the Department of Health. We need the better management of resources in the Department, and the use of in-year monitoring bids to create conditions around pressures in the Department of Health needs to stop. We need a reduction in negligence bills and fraud, and the eradication of frivolous court battles fought on a whim of the Health Minister.

Education, too, is a key tool in the battle against inequality. It is perhaps one of the most significant opportunities to overcome inequality provided in a person's lifetime. That is why we must continue to protect education budgets.

There is no doubt that, collectively, we have had to make some difficult decisions in order to live within our Budget. Since the Conservatives took power in Britain in 2010, their austerity policies have reduced our Budget by £1·5 billion in real terms. The Westminster Government's austerity economics are morally unjustifiable and economically unsustainable. British economic policy has failed, even on its own terms. It has failed to reduce the deficit as planned, and it has failed even more comprehensively to rebalance the economy. The human cost of austerity is too high a price to pay.

Sinn Féin does not accept that there is a trade-off between balancing the books and having a balanced society. Fairness and prosperity go hand in hand. Sinn Féin's approach is part of a growing international consensus. It is basic common sense that, as a society, we will do better if we can benefit from the skill, talent and innovation of all of our people. Since 2011, Sinn Féin has opposed welfare cuts and insisted on welfare protection. Sinn Féin is for equality, social justice and enterprise. We believe in economic growth, and we believe in competitiveness. That will not happen without investment in our communities, investment in training, investment in infrastructure and investment in job creation. A major strategy is needed to grow our private sector and to reindustrialise the North —

Photo of Fearghal McKinney Fearghal McKinney Social Democratic and Labour Party

Can the Member explain how what he has just said is consistent with his party's decision last week to vote through the bedroom tax?

Photo of Christopher Hazzard Christopher Hazzard Sinn Féin

I thank the Member for his intervention. I will come to that in a second.

A major strategy is needed now to grow our private sector and reindustrialise the North, but that should not be done at the expense of maintaining public services or the welfare of its citizens, especially those who are the most disadvantaged. All the other parties, including the SDLP, were prepared to compromise on welfare protections. As a result of Sinn Féin's determined refusal to back down on the issue, we ensured a better negotiated outcome and welfare system for the North. At its core is a six-year package of £565 million to create, among other mitigation funds, a supplementary payment fund specifically to protect children with disabilities, adults with severe disabilities and people who are long-term sick. Additionally, despite the political rhetoric of the party to my left, not a single person in the North will have to pay the bedroom tax. Anti-poverty measures have been retained, and the success rate for new disability applicants will be no less between the new system and the previous system.

Our approach is based on what Sinn Féin believes is in the interests of the people in the North and what is required immediately to assist us to build a just, fair and equal economy for the North and the island. We will continue to seek economic power from Westminster to pursue a different course from that of austerity, inequality and poverty. Sinn Féin wants to build an economy that is based on prosperity, fairness and equality, not cuts. Westminster promises only austerity, pain and hardship for our people. The human cost of the Union is now too high for our citizens to bear. The only way in which to end austerity —

Photo of Roy Beggs Roy Beggs UUP

Will the Member give way?

Photo of Christopher Hazzard Christopher Hazzard Sinn Féin

No, I have taken enough interventions for today, thanks.

The only way in which to end austerity is to take the powers to make our own economic future and to carve out an alternative economic path. The Tories are wedded to austerity. Left to its own devices, British Labour has made it crystal clear that it intends to carry on with the Tory cuts that are inflicting real pain on families across the North. In recent weeks, we have seen Labour and the Tories vote for £30 billion more in cuts. It is time to end the imposition of slash-and-burn economics in the North by the British Government. Collectively, we can seek the powers from Westminster to build a strong and sustainable economy. We can choose to leave austerity behind and actively work together to revive our economy here in Ireland. We must move beyond bookkeeping to driving economic growth. That means working collectively to exploit every avenue that we have to build a progressive, strong local revenue base that does not harm but strengthens our people, our competitiveness, our economic security and our economic growth.

Photo of Nelson McCausland Nelson McCausland DUP

The Committee was briefed by the Minister in early October 2014, and, at that stage, members began to probe what the likely size and impact of the reduction to the departmental budget would be. At that stage, the Minister did not know the exact size of the reduction. However, she indicated that the departmental arm's-length bodies had been instructed to make plans for savings at a variety of different levels. The Committee ascertained at that stage that a strategic approach to budget reductions, rather than a simple salami-slicing exercise, would be taken by the Minister and her arm's-length bodies. The Committee also heard from some of the Department's arm's-length bodies on how they will seek to manage reductions to their budgets in the year ahead.

Throughout the budget reduction process, the Committee has stressed that reductions must be applied as part of a strategy that seeks to protect front-line services to our communities and to support the Department's stated objective of promoting equality and tackling poverty and social exclusion. The Committee began its scrutiny of the draft DCAL budget for 2015-16 on 25 November and heard from officials about the Department's plans for the allocated budget reduction. We were then briefed on the content of the consultation. The Committee subsequently received a summary of the responses to the original draft Budget consultation. In addition, at the Committee's meeting on Thursday, it received and considered a further budget paper from the Department. It sets out the Department's savings delivery plans, impact assessments of the budget reductions and risk management plans, as well as those of its arm's-length bodies. The Committee has also written to the DCAL's arm's-length bodies for more detailed savings delivery plans and will seek to be briefed on those in the weeks ahead.

Like all Members, I and the Committee would prefer that budget reductions did not have to be made.

However, Northern Ireland is subject to the same financial realities as the rest of the developed world and is subject to the same pain in the wake of financial crises that are beyond our control.

The Committee also considered reductions to the DCAL budget from the perspective of ensuring that no aspects of the Department's remit are so hollowed out that they are damaged beyond repair. That is not an easy task. DCAL has a relatively small budget, and the reduction may also seem small in terms of the overall Budget at the Executive's disposal. However, the Department is facing a 10% budget reduction compared with the 2014-15 budget, and that will inevitably cause pain.

The Committee welcomes the fact that the initial budget reduction was lessened by the Executive finding a further almost £2 million for DCAL. That will go towards addressing inescapable pressures in the Department and to NI Screen for its skills development work, including Cinemagic. Therefore, rather than the budget of £89·9 million as first anticipated, DCAL will have a current expenditure budget of £91·7 million for 2015-16.

As a result of delays to the Casement Park development, the DCAL capital investment allocation for 2015-16 will be £8·1 million, not the £54·1 million first envisaged. The Committee has put on record its concerns around the delays on Casement Park having a knock-on impact on the other aspects of the Executive's regional and subregional stadium programme. It is important to the Committee that work continues, and members were pleased to note an allocation of £630,000 for the development of the subregional stadium plan in the January monitoring round. The Committee is probing how that money will be spent and what work that will entail.

The upshot of the Executive's reconsideration of the DCAL budget means that the reduction amounts to 8·2%, rather than 10%. There will be a reduction to the Libraries NI budget of 7·5% and reductions of 11·2% in all other areas. The core departmental budget of £19·6 million includes the additional allocation for the development of the subregional stadium plan and £500,000 for essential building overheads at the Public Record Office of Northern Ireland (PRONI). The Department intends to manage its budget reduction through decreasing its pay bill by £1·4 million, reducing grants and programmes by £867,000, and reducing overheads by £100,000.

The Committee accepts the need for the Department to reduce administration costs to more manageable levels. Members hope that that can be achieved equitably and sensibly through a voluntary exit scheme for staff and other measures. The Committee will scrutinise reductions to the core programme budget in the months ahead.

We also commend the efforts that have been made by the Executive and the Minister to minimise the reduction to the Libraries NI budget. That will now amount to 7·5%, and it is anticipated that no libraries will have to close. However, temporary and relief staff will go, opening hours will reduce and the budget for new stock will see a considerable fall. The Committee has been a strong supporter of our libraries and believes that they are not only at the heart of our communities but that they can further be developed as venues and hubs for arts and culture. That could provide new revenue streams and, potentially, allow for longer opening. The reduction of almost £2·4 million will leave Libraries NI with a budget of £29·4 million for 2015-16.

The Arts Council sought to minimize the impact of in-year budget reductions over the last year on its clients by absorbing those internally. The Committee applauds that principled approach. However, it will not be possible for the body to absorb the £1·4 million budget reduction it faces in 2015-16. Over £1·1 million will be reduced from intended grants, as well as pay bill and administrative cost reductions of almost £250,000.

The Committee knows that the Arts Council intends to approach grants reductions in a strategic way that will seek to minimise the impact on the body's overall strategic functions, and members commend that. However, its budget of £11·1 million going into 2015-16 will create tremendous challenges, and the Committee is hopeful that an upcoming Executive arts and culture strategy may see greater cross-departmental funding of arts and culture, which could see overall funding for the sectors increase.

Sport NI's budget reduction for 2015-16 of just over £1 million will see decreases in grants and performance and coaching activities of £800,000; it will also see the body reducing its administrative overheads by £250,000. However, Members are aware that the body has exciting plans in the year ahead that will see greater cooperation with the new super-councils. It is to be hoped that economies of scale, together with the pooling of resources, will ensure that ambition in sport here will not be diminished.

The North/South language bodies and Waterways Ireland, while outside the scope of this budget reduction exercise, will see their budgets fall by over £1 million collectively, as agreed at the relevant North/South Ministerial Council (NSMC) meetings.

Armagh Observatory and Armagh Planetarium will go into 2015-16 with a budget of £1·4 million, a reduction of over £170,000 on this year. With such a small budget to start with, it is imperative that the impact of the reduction on the bodies' budget be carefully monitored so that it does not have a disproportionate impact. The Committee places considerable value on the work of those bodies and appreciates the global reputation that they enjoy.

As I have already indicated, NI Screen has benefited from additional funding from the Executive to ensure that inescapable pressures can be met. The Committee welcomes this. The Northern Ireland Museums Council must find savings of £30,000. However, the Committee is discussing options with the body, and the Department and members are hopeful that solutions can be found.

Inevitably, important programmes and projects are lost when budgets are reduced. However, we must all become more creative and collaborative in our use of funding and look to other sources of revenue. In that context, the Committee was briefed last week by the EU unit of Belfast City Council. There was a general belief that more could be done in accessing money and resources from that source. We were impressed by the unit's success in placing, effectively, this work — EU networks and policy development — at the heart of what it does. It really does provide a model that Departments and the new super-councils could learn from. There is no alternative to new ways of thinking about funding, and the Committee is keen to play its part.

We face difficult financial times, and it will be difficult for a number of these arm's-length bodies over the coming year. Nevertheless, we wish them well. The Committee supports the Bill.

Photo of Anna Lo Anna Lo Alliance

I rise as the Alliance Party's spokesperson on the environment. When departmental officials briefed the Committee for the Environment on 5 February, we were advised that, after meeting inescapable expenditure, the Department has only £1·4 million to fund a range of programmes and projects being carried out by councils and the private and voluntary sectors. The shortfall is over £8 million, although officials stated that the Minister would look at the £4·2 million from the carrier bag levy to see whether any money could be reallocated. This will be limited, given the already committed funding for projects and the restriction on how receipts can be spent.

Seeing projections from officials, it looks like the axe will fall mostly on activities that are currently undertaken by NGOs. I cannot emphasise enough the importance of the NGO sector in getting value for money for us by delivering government objectives in a cost-effective manner. Funding for this sector can bring significant added value through match funding and co-funding, accessing the passion and energy of volunteers, the involvement of students and people of all ages, and managing significant areas of land for public benefit.

The environmental sector is also of value to Northern Ireland in the retention of skilled and qualified young people. DOE cuts would inevitably contribute further to the Northern Ireland brain drain.

(Mr Deputy Speaker [Mr Dallat] in the Chair)

I understand from the Northern Ireland Environment Link that, within natural heritage grants alone, DOE funds around 50 organisations through grants and contracted services. Total funding in 2014-15 to those organisations is approximately £3·5 million. That is over 110 posts affecting more than 130 individuals. Within that relatively small government input, those NGOs tap into a volunteer workforce of over 350,000, manage over 314,000 acres of land for government benefit, spend over £20 million in the Northern Ireland economy and leverage in £3·20 for every £1 invested in core funding. The potential loss of those jobs in some of those organisations will have a detrimental effect on the local economy. Those organisations tend to be small and lack resources and they are likely to find it difficult to navigate through a period of sudden budgetary loss that may result in their closure. The kind of activities that will be affected are managing natural and built heritage sites; providing access to sites; education programmes; managing and improving habitat; protection of wildlife; developing research and knowledge; monitoring sites, wildlife and access; and enabling the public to access and understand the natural and built environment.

NGOs in Northern Ireland have been very successful in accessing non-government funds. A good example is the Heritage Lottery Fund landscape partnerships, of which there are now at least seven in Northern Ireland. They all draw in significant leverage. The leverage is, on the one hand, evidence of the quality and potential of the Northern Ireland environment and, on the other, a good example of what will be lost if the NGOs that have leveraged that input are lost. Furthermore, there are clear linkages between what the NGOs deliver in Health, Education, Agriculture and Rural Development, Regional Development, Enterprise, Culture and Leisure, and the community development aspects of OFMDFM. The same issue emerges in all those areas.

The environment is the foundation for our society and economy, yet it is taken for granted and not treated as the key resource upon which future well-being and prosperity depend. A relatively small investment in the environment sector could lead to significant savings across all those Departments. The environment sector has advised me that it strongly encourages DOE to look at ways to develop those relationships and to work in partnership with NGOs on delivery.

According to departmental officials, for them to fund the current programmes that are contracted out to councils, the private and voluntary sectors, as well as road safety campaigns, DOE would have to lose 500 posts to save £8 million from salaries. That is a third of the workforce. That is impracticable, if not impossible. As a voluntary exit scheme will not start being implemented until at least autumn 2015, the Department is unlikely to find the necessary money through staff reduction within six months of the next financial year. It does not make sense for the Department to lose one third of its staff, who are mostly professional or technical staff carrying out the Department's vital functions and services.

It is most likely, therefore, that the non-ringfenced areas of departmental expenditure limit will not have the necessary funding and that this will impact mostly on the NGO sector.

Looking beyond the next Budget, before discussions on how the DOE will be broken up and its functions absorbed by other Departments, it is important that the House again considers the urgent need to create an independent environment agency to ensure that our already neglected environment is not completely abandoned. The agency needs to be external to any Department so that it can hold all Departments to account for their policies and practices in relation to the protection of the environment, which is a responsibility for all in government.

Photo of Trevor Clarke Trevor Clarke DUP 4:00 pm, 16th February 2015

I welcome the opportunity to contribute to this debate. I do not think there was anyone in this House who expected that the budgets for 2015-16 would not be tight, even though some of the pressure was released by the Stormont House settlement. What we in the Committee for Regional Development did expect, however, was a mature and detailed debate about the options available to the Department with a view to identifying the best solutions to the financial constraints placed on the Northern Ireland block grant. Instead, we got what the Committee described in its response to the Finance and Personnel Committee on the draft Budget as a sensationalist approach from the Minister and his Department.

What we got was a Minister who chose not to debate his budget but to run to the press to bemoan his lot. What we got was a Minister who was more interested in the sound bite than in sound financial scrutiny; a Minister more interested in getting his own picture on TV and in the papers than in providing the citizens of Northern Ireland with a picture of how to deal with these financial pressures. The current vice-president of America, Joe Biden said:

“Don't tell me what you value, show me your budget, and I'll tell you what you value.”

Mr Deputy Speaker, if we examine the budget that the Minister for Regional Development brought to the press and announced to the world, we will be in a position to gauge his values and those of the officials advising him. He does not value the social and economic well-being of Northern Ireland, as he slashes capital and structural investment in roads. He does not value the quality of our water or the treatment of our waste water, as he slashes Northern Ireland Water's budget, thereby increasing the risk of an EU infraction. He does not value those living in isolation, as he allows Translink to accumulate more cash with not one but two above-inflation increase to fares and to cherry-pick the most profitable routes. He does not value the safety of the most vulnerable in our society, as he boasts in the press that tens of thousands of street lights across Northern Ireland will be lost.

The Department for Regional Development does not have the maturity to manage its budget, never mind debate it. Instead, it allowed and encouraged its Minister to indulge in begging-bowl politics. My colleague, the Minister of Finance, stated previously that it is unacceptable for Departments to manage their budgets in the expectation of additional funding through the Executive's in-year monitoring process, as the Minister attempted to do through the release of value of the Belfast Harbour Commissioners. This advice continues to be given to the Minister for Regional Development, yet in its consultation paper on the draft Budget, the Department clearly stated that it:

"will be reliant on the Executive’s in-year monitoring process to secure tens of millions of pounds of additional funding necessary for essential structural maintenance."

The Department will also need to get out the begging bowl to bail Translink and itself out of the mess it has made of budgeting for phase 2 of the Coleraine to Londonderry rail track. This is not the mature handling of a departmental budget, but a recipe for disaster, as evidenced by the release of value and the Coleraine rail track.

The Committee for Regional Development wants to, and has tried to, engage and debate with the Department on its budgets. We will continue to do so. However, the Minister and those who advise him must be willing to inform the Committee and bring options to the table. They must be willing to take the initiative and be innovative, not like the Department we have experienced with regard to its budgets, which is non-transparent, reliant on the begging bowl and resistant to change. It will undoubtedly be a tough journey, but it will at the very least be a shared one, and one that benefits Northern Ireland. The Committee is keen to take this path, and I hope the Department is too.

Photo of Phil Flanagan Phil Flanagan Sinn Féin

Go raibh maith agat, a LeasCheann Comhairle. I welcome the opportunity to speak in the Budget debate and the agreement that was finally reached on the Budget. It is not an easy Budget. We certainly have a difficult task ahead in protecting public services. It is quite clear that we have received no gifts from those who are trying to drive our agenda in London.

The task of balancing our books, tackling inequality and driving economic growth has to be to the fore of our minds as we move forward. Tackling inequality starts with the economy and how we deliver public services. It starts with supporting businesses and creating sustainable employment, ensuring that people have access to a decent job and wage. The Budget prioritises education, skills and development, job creation and growing the economy. Growing the economy and tackling disadvantage was the number one priority of the 2011-15 Programme for Government, and this Budget follows on very much in that guise.

The final Budget makes additional allocations of more than £150 million. It prioritises Health and Education. The final Budget sees DEL receiving a total of £33·2 million in additional funding. DETI will receive £3 million, which will go to Invest NI, as well as over £7 million in the change fund allocation. It must be remembered that all that has been agreed against the backdrop of an austerity agenda from Westminster.

We want to build a society that protects our environment and promotes the life chances of every child, young person and adult in the North to ensure that they have the opportunities to fulfil their potential and develop their talents. Few, if any, countries in the world have the economic potential that we have here in Ireland, North or South. We have a talented and skilled workforce, world-leading universities and a modern college sector. We have a strong international reputation for producing quality goods and services, with notable successes in sectors such as food and drink, the creative industries, life sciences and modern manufacturing.

With the limited devolved powers that we have, our economic performance is improving, but far too many people still feel that they have to leave each year to get a job or further their career. Of course, some people will always want to travel and work elsewhere, but that must be a choice, not a requisite for those looking to succeed. I was looking through the latest spreadsheet from an Cumann Lúthchleas Gael, the GAA, on the number of people who have transferred out of their home club, and it is quite clear that emigration still presents a deeply worrying problem in rural communities. The number of young men and women who are transferring from clubs in rural parts of Ireland to England, Australia and America is a deeply worrying trend. We need to make sure that there are proper jobs and a well-built society for those people to return to.

With greater fiscal powers, our economic policy would be tailored precisely to our own needs to create jobs here and to tackle the barriers to employment by exerting control over tax, welfare and National Insurance. We would want to see improvements in productivity, employment and population. That would lead to additional tax revenues, which would help close the fiscal gap that we hear so much about.

Together we must put every effort into developing a more sustainable and balanced economy, and that means driving investment in science, innovation, skills and infrastructure, while encouraging a more enterprising and entrepreneurial culture. Our IT sector and professional business services show particularly strong growth, and we must build and capitalise on this. Invest NI does great work in promoting and creating jobs, but much more is required if we are to tackle regional disparities, as that is, after all, a Programme for Government commitment.

Recent figures I have obtained for job creation show that Invest NI helped to create over 2,000 jobs in Belfast but only small numbers in areas west of the Bann during 2013-14. There is a direct link between the number of visits by foreign investors to a given area and the number of projects and jobs that are located in that area. It is therefore extremely disappointing to me that so few visits take place to places like Fermanagh on an annual basis. We all know and are told ad nauseam, that you cannot force an investor to locate in a particular area. I might not agree with the principle, but I acknowledge that that reality exists. However, there is absolutely nothing stopping Invest NI using its substantial budget to better direct investors into areas west of the Bann that have been neglected since partition.

Everyone who comes to my county of Fermanagh falls in love with the place, and why wouldn't they? It is one of the most beautiful counties in the whole of Ireland. We have a great deal to offer visitors but also potential investors. Fermanagh has a highly educated, vibrant and hard-working population, with plenty of young people looking for employment opportunities. We have excellent schools spread across the county that help to produce a skilled workforce, which could attract investors if places west of the Bann were promoted effectively.

Fermanagh also provides a good work/life balance for people, with good opportunities for social and cultural expression. These are the types of positives that should be promoted about Fermanagh, but Invest NI will not give potential investors the chance to fall in love with the place. It should be using its substantial budget to incentivise investors into neglected areas. However, during 2013-14, the year in which £92 million was wasted hosting the G8, only three potential investors were brought to Fermanagh. Despite all the lofty promises that were made in advance of the G8, none of them has materialised. We got new paint on our bollards in Enniskillen, some temporary mobile phone masts were erected to facilitate those who were coming, and many run-down shops were given false fronts to present Fermanagh as a thriving county. The mobile phone masts have been removed, the paint on the bollards is chipping, and the closed shops remain closed.

Invest NI is failing Fermanagh. It has been given a substantial budget, year after year, but most of us west of the Bann speak out in a unified voice to say that we are not getting our fair share of investment. There are some dissenting voices to those remarks, but they do not stand up to scrutiny when you look at the facts. Growing a sustainable and balanced regional economy must become a political and social priority. It was a Programme for Government commitment, but some of the parties involved in this commitment seem to pick and choose which commitments they support at any given time.

The policies of the British Government are working for too few and denying opportunities to too many. We should not merely adopt their policies. Britain is highly imbalanced, and regional inequalities have grown alongside social inequalities. Britain now has the highest levels of inequality of anyplace in the EU. If we are to address this, we need to work together connectedly. We need to create an education and training environment that will equip our young people to fulfil their potential and maximise the opportunities for island-wide education and training.

We need to gain control of the tax system so that we can simplify it, close poverty gaps, create a progressive tax system, remove barriers to business development and maximise the opportunities from the island economy. We need to develop employment policy to bring together employers and unions to boost workforce participation and increase skills and productivity. Boosting our productivity by just 1% would create thousands of jobs in the long term and generate substantial tax revenue.

We need to address the scandalously uncompetitive price of energy for our manufacturing companies. We must tailor policy to boost key job-creating sectors in which the North has an international comparative advantage, such as in renewable energy and the agrifood sector. We need to reindustrialise the North and, indeed, the island as a whole. Our combined focus must be on strengthening manufacturing, promoting innovation and encouraging international trade and development. We cannot simply tell everybody to get a degree in computer programming and move to Belfast. That is not building a sustainable economy.

We must boost our infrastructure and transport networks. We cannot repair and rebuild our economy and our public services without maximising the returns for all our citizens, building sustainable employment opportunities across the North and the island as a whole and ending regional disparities, and job creation is central to this.

Our wider economy is too heavily focused and reliant on consumer spending, which is often driven by consumer debt, funded by extortionate payday loans and high-interest credit cards. Such economic drivers need to be adjusted, and we need to move to a more sustainable economic driver.

What are the priorities as I see them for Fermanagh in the coming period? I know that the Minister for Employment and Learning is working on a capital build for a new rural university on the site of the old Erne Hospital in Enniskillen. Anybody who visits Enniskillen now will see that most of that site has been cleared. There is a huge opportunity there for a shared services site on which we can have a range of public-sector services all located in the one place instead of, as some Ministers are trying to do, moving them to Omagh or Dungannon. There is scope there for the likes of a library, the jobs and benefits office and the Housing Executive to co-locate along with the further education college in Enniskillen. That would provide synergies for delivering public services and help to regenerate a part of Enniskillen.

The DEL budget has been given a considerable uplift from the draft Budget to the final Budget, but I have serious questions about how that has been used.

It is quite common for us to attack the Minister, but we might excuse him for this one.

Queen's has implemented a serious cut to the students' union and the student support mechanisms that it offers, yet there has been absolutely no mention of addressing the salary of the vice chancellor, who earns £250,000 a year and gets a house, a car and probably a driver. He also has a wine budget, but it is more important to cut somebody working for the students' union than to try to address those issues. Those are the types of solution that we want our universities to work towards. Instead of hammering students by campaigning on the radio for an increase in tuition fees, they should be looking at where substantial savings can be made closer to home without having an impact on front-line services.

The hospital in Enniskillen is constantly promoted as one of the great things that the Executive delivered in recent years, and it certainly is, but there are problems with it, too. We have simply built a hospital that may well become a white elephant unless adequate services and investment are put into it. The hospital needs an investment of between £1 million and £1·5 million to protect maternity services, which are under threat. At present, any expectant mother with an elevated BMI or diabetes is encouraged to go to Derry to give birth. That has to change. It is not good enough to tell mothers that they have to drive an hour and a half from home to have a child.

There are certainly enough people in Fermanagh, Tyrone, south Donegal, Leitrim, Cavan, Sligo and Monagahan to justify a fully functional maternity services unit in the Enniskillen hospital. We need investment in staff at the hospital to meet the standards in the 2012 maternity strategy. We need ST3-level resident cover in obstetrics, paediatrics and anaesthetics, as well as compliance with the review of paediatric health-care services in hospitals and the community. To do that, the paediatric resident on-call medical staff have to be at ST4-level or above. So, this investment has to be a priority. It has been sitting with the Department, the Public Health Agency and the Western Health and Social Care Trust for a considerable time. I encourage the Health Minister to put that investment into Enniskillen hospital at the earliest opportunity and to retain and expand maternity services there.

In wider terms, we are missing a significant opportunity in Fermanagh. More people from across the border availed themselves of services in the old Erne Hospital than use the current hospital. I cannot get my head around that because coupled with that has been the reduction of services in hospitals adjacent to the border in the South. Common sense tells you that more people would try to use a hospital near to them, so why have we not increased the number of people crossing the border to use our world-class hospital, as the Health Minister would, rightly, describe it? There needs to be a focus on attracting patients from the South. There were problems with the availability of insurance cover in the old hospital, but it is my understanding that all of those have been sorted out.

An increase in patient numbers would bring increased revenue for the Western Trust. It would also allow for services to be expanded in the hospital because clinical professionals would be able to build up more hours and deliver more services locally instead of people having to travel to Craigavon, Belfast or Derry for a routine clinic appointment. As far as I can remember, the logic for building the hospital in Enniskillen was the opportunity that it offered for patient cross-border mobility. Effective cross-border planning for our hospital is not happening yet, but there is still time.

In Fermanagh, people wait for up to two years for a routine hip or other orthopaedic operation. That is simply unacceptable. The amount of money that the Western Health and Social Care Trust, and probably the other trusts, spend on managing pain and providing often inadequate home-help provision for people stranded in their beds because there is such a lengthy waiting list for hip operations makes no sense to me. It does not make financial sense, and it certainly does not make social sense that you leave somebody lying there for two years, taking a wide range of pain management medication daily.

We have been told that the Health Department is implementing Transforming Your Care and invest to save in the long term. I do not see that strategic approach being implemented by some of our overpaid managers, who have amassed over £1 million in pension pots and earn colossal salaries every year. All the while, front-line staff, many of whom are paid below the living wage, have a claim for a very basic pay increase to meet inflationary demands rejected. That two-tier payment policy in the health service is not acceptable, and it needs to change.

In closing — I am kind of getting there — the Budget that we have agreed is not the Budget that we would all have wanted if we were starting from a blank canvas, but we must remember that we do not have the full range of fiscal powers to make the changes that we need to see here. Nobody got everything that was wanted out of the Budget, but the parties that are speaking against it and that may vote against the Bill do so without offering any alternative. To be fair to the Alliance Party, it proposed some alternatives, including an increase in tuition fees and the introduction of regressive water charges. Thankfully, the Executive have decided not to introduce those measures, and that will be the case as long as we are about.

Finally, I want to give the Minister something that he can address by touching on the impact of rates on businesses across the North. RPA has had a negative impact in some areas, and nowhere more so than in Fermanagh. However, the £30 million in rates conversions that he and his colleagues introduced have significantly softened the blow and reduced considerably any potential rates increase that domestic householders and businesses in Fermanagh face.

However, in the revaluation of non-domestic rates, which was recently announced, there were always going to be winners and losers. That is just the nature of a rates revaluation, but it is my belief that the rates system is unfit for purpose. It does not give any consideration to the level of profit that an organisation makes, which is unfair. Simply to take the estimated rental value of a building over a year and set that as the rates bill is not a good approach. We have businesses from completely different sectors paying the same rates, which is deeply unfair. There is a small restaurant and guest house in Belcoo that pays the same rates as a commercial bank on High Street in Enniskillen. I have spoken about that bank before, because it keeps charging me £42 a go in unauthorised overdraft fees. I will tell you this, though: the bread that I buy out of that restaurant is very nice, and I will not have anything bad said about it.

Such an approach is regressive and does not support our business sector. It is deeply unfair, and I implore the Minister to give some consideration to changing completely how rates here are calculated so that they are not solely based on the property that a business occupies and at least take some consideration of the level of profit that a business can make. If the Minister will oblige and is willing to grant me more time to bend his ear, I have put in a request for him to meet me and a number of business organisations.

I will leave it at that, in the hope that we get out of here at some stage this evening.

Photo of Jim Allister Jim Allister Traditional Unionist Voice 4:15 pm, 16th February 2015

In normal arrangements of government, you can usually detect from the direction of travel of the Budget of that Government what their values and ethos are, and you can see within it the pointers as to the policy of that Government. Mr Trevor Clarke, in a rare excursion into erudition, reminded us of something that Joe Biden said when he said:

"Show me your budget, and I'll tell you what you value."

Show anyone this Budget, and could anyone tell what this Executive value? It is such a mishmash of contradictions that it stands for nothing other than keeping those who penned it in office. That is the indisputable priority of this budgetary document: cobbled together to keep this place, and those who benefit from it, in office.

It is not so as to lay out a clear, dynamic way forward for Northern Ireland — oh, no. Rather, it is to say, do, spend and borrow whatever it takes to keep Stormont ticking over.

The document is so eminently contradictory. On one hand, we read in it that there is supposed to be, in accordance with the Programme for Government, a great desire and ambition to drive Northern Ireland forward economically. We then discover that the greatest innovation in the Budget is to implant in it, not for this year but for future years, the underwriting of overspend on welfare. I turn to page 14 of the Budget document and see the quite appalling chart of economic inactivity rates in Northern Ireland, which continues to have the most unenviable of positions: top of the league of economic inactivity. One just might have thought that, in consequence, this would be a Budget designed to incentivise people into work, but it is quite the reverse. It is a Budget to cocoon people on benefits. That, of course, has been the centrepiece of the Stormont House Agreement. Rather than following the path of incentivising people into work — oh no — we have conjured up, through borrowings and cuts elsewhere in the block grant, a spend of £565 million over the next six years. In consequence, I suspect, we will continue to have the highest rate of economic inactivity in the whole of the United Kingdom.

This is not a Budget of clear, dynamic direction; it is a Budget of trying to blend the inherent irreconcilabilities of rants about austerity from Sinn Féin and the timid attachment that some still hold to trying to build the economy. I suggest that what we have is exactly as I have described: a document of mishmash and muddle. It is also a document of further squander, because that will be the outcome.

All that is against the background of this devolved region, on foot of these arrangements, having the highest public borrowings per head of population of any part of the United Kingdom. This small region with £1·8 billion of public borrowings. Whether Sinn Féin likes it or not, that will have to be paid back. In listening to Sinn Féin, of course, there is nothing new in that — it has always had a sponging mentality. You think that nothing ever has to be paid for in life or in government, that you just keep increasing the size of the begging bowl and that the rest of the world owes you a living and must keep filling it to your demands. That is exactly the mentality that we see and hear from the second biggest party of this Government and what manifests itself in the Budget in order to make it an agreed Budget. One really despairs about the economic direction of this Government other than to aid the bankrupting of Northern Ireland, which, of course, suits Sinn Féin fine. That, of course, fits entirely with their political philosophy.

Of course, it is no surprise that tucked within the Budget are the now standard levels of squander on "North/Southery", propping up institutions for the sake of calling them institutions that, frankly, bring nothing that a Skype phone call or a phone call could not bring in terms of North/South cooperation — oh no. For the sake of it, because someone else is paying, we need to have all these North/South institutions, not because they deliver anything for anyone but because they are essential to the political infrastructure. So, let us pour millions upon millions of pounds, year on year, into them. Then, when we get to the point of needing to top up welfare and everything else, let us just cut the money for our schools, our vital services and our hospitals because the priorities that must be met from Sinn Féin are those that are, to them, far more important than making government work.

One could go on about the squander. I look at the expenditure that the Budget will allow to continue. I look at the squander in the neighbourhood renewal programme, the idea of which is good and sound if it were restricted to obtaining economic advancement for deprived areas. However, who would believe that, under neighbourhood renewal, and under a DUP Minister since 2011, someone somewhere thought it proper to spend £2·1 million on Irish language groups — not a penny, I might say, on Ulster-Scots groups. Someone thought it appropriate to give £250,000 in funding to LGBT communities under neighbourhood renewal; £170,000 to an LGBT group in Strabane and Lifford, which I think is outside the jurisdiction; and £2·6 million of neighbourhood renewal money to the GAA. It is that squander and that abuse of programmes that could produce good results that bring all these matters into disrepute.

I look at the budget of OFMDFM. The biggest growth industry in OFMDFM since 2007 has been its coterie of equality staff. We now have 124 OFMDFM staff — of course, OFMDFM has almost twice the staff of the Prime Minister — working in a unit called "equality and strategy". They obviously do not do irony when it comes to strategy. That is a phenomenal growth. Yet a real equality issue, like the long-standing claim for equal pay for civil servants who worked in the PSNI etc on secondment, is still, even yet, unresolved.

The Finance Minister apparently prepared a paper. He tried to table it, something like last June, and it still has not even got onto the Executive table. We can find time and money to squander on the matters that I have referred to, yet we cannot find time, because Sinn Féin has been blocking it, I suspect, to address a real, a genuine equality issue such as that of equal pay. I do not think that there is a penny in the Budget to resolve that issue. It is shameful that, after all this time and after all those people have been short-changed on the equal pay issue, there is not a penny in the Budget to redress that and give them relief. I find that quite, quite shocking, but it speaks to the perverse priorities that seem to dominate this Budget.

If the opportunity provides itself, I will happily vote against the Budget, not because — taking care of the attempt to pervert, sometimes, what is said — I do not want to see money spent on our hospitals, in schools, for victims or on vital services, but because I want to cry out against the squander in this House on totally unmeritorious matters. This is an occasion to do that. I am glad that the Finance Minister has brought the Bill to the House. Reading some correspondence from him at the weekend, you would have thought that we had had the Budget debate. What we had three weeks ago was a mere motion recommending the Budget. It takes this Bill, and it took last week's Vote on Account, to actually implement anything of a budgetary nature, making this the proper forum for these discussions.

Then, I think of business in this community. I look at how some businesses in my constituency have been treated. I think particularly of the burden of rates that has been placed on businesses. Let me, for a moment, tell the House of a real-life example of a business in Ballymoney Street in Ballymena.

In 2009, a lady of initiative sets up a business on that street. The Minister's rating department writes to her to say that her rates shall be £3,000 a year. She budgets, sets out her financial plans on that basis and is making out accordingly. Two years later, the same rating department from the same Department writes to that lady to say, "We made a mistake; your rates are £10,000 a year and you owe us the difference for the last three years". This is a lady who, in good faith and through no fault of her own, balanced her books on the premise of what the Department told her: that her rates would be £3,000 a year. Then, in that most high-handed of ways that only departmental officials sometimes can carry off, they simply tell her, as if it is nothing to do with them, "We made the mistake; it is £10,000 a year and you owe us an extra £7,000 for the three years". That lady has been faithfully paying the £10,000 a year ever since. However, she naturally has said to the Department, and, through me, to the Minister, "Now, come on: it is so unfair that you make the mistake, then apply that as an albatross around my neck and expect my business to survive because of your mistake".

What does the Department do? They throw back in her face the money that she is prepared to pay to try to pay down the debt. She offers to pay them £50 a month, because her budget is so tight. The Department says, "Not at all. We need it all". The best they will do is, I think, £260 a month. That is what they need. It is undoable for her. What does the same Department, headed up by the Minister who tells us so many times at the Dispatch Box that he is interested in helping business, do? It issues bankruptcy proceedings against the lady to try to put her out of business. Instead of recognising their fault and trying to stretch to make an arrangement that can keep her in business, their cruel action is to try to bankrupt her.

No later than today, I have a letter back from the Finance Minister in which he stands over how they have treated that woman. Shame on this Department, which has squandered so much money elsewhere; it cannot even find an accommodation for someone who is struggling and who, through no fault of her own, has been put in this position. All she gets is the bureaucratic slap down from the Minister and the Department. That is shameful. I thought that the Department was capable of better than that. I also thought that it might have taken them less than three months to reply, but there you are.

It seems to me that we have a Budget that faces in so many different directions that it does not know where it is going. It is motivated only by doing whatever it takes to keep things together. As for delivery, who knows? Who knows where it is going? Who cares? That seems to be the attitude. Thank you.

Photo of William Irwin William Irwin DUP 4:45 pm, 16th February 2015

The Agriculture and Rural Development Committee, like other Committees, takes regular briefs on financial and budgetary issues from the Department as part of its role to scrutinise the Department. I have, on behalf of my Committee, expressed the Committee views on the Budget for 2015 to 2016 a number of times in the last few weeks. So, Members will not be surprised that there is very little in this speech that is new.

As always, the Committee position is that, as far as it is concerned, one of the main remits of DARD is to pay grants to farmers. By that I mean the payment of EU grants, particularly what used to be called the single farm payment, but which, since 2015, is the basic payment. In the Committee, we count that as the front line, and we want to make sure that that is protected.

We also count as front line the provision of other services to the wider rural community. That covers such areas as the rural development programme, the rural White Paper and the tackling rural poverty and social inclusion (TRPSI) framework.

I just mentioned the TRPSI framework. As some of you will know, it is a Programme for Government target. As a Committee, we recently undertook some in-depth scrutiny of the framework and have just produced a paper on it, which we hope to have debated in the Assembly in the near future. We have a number of recommendations for any successor framework, including one that relates to budget.

The Minister of Agriculture and Rural Development has provided the framework with a budget for the 2015-16 year that is more heavily weighted to capital than previous. As a Committee, we had no major issue with that, but we did have some minor concerns. We feel that the Department must acknowledge that the funding for the TRPSI framework has been largely resource-based and that, without doubt, engagement with the stakeholders will be required to ensure that suitable capital projects can be identified and that such projects can be delivered within the framework.

As with all aspects of government, the DARD budget may be challenging in the next few years. Tomorrow, we will be hearing from Agri-Food Strategy Board (AFBI), an arm's length body of DARD. From what I have seen, its budget will be very difficult. The Committee will take oral evidence from AFBI tomorrow. I have had a quick glance through the papers that it has provided, and they do not make happy reading. AFBI has a key role to play in the industry, and its research is essential in growing our farming and agrifood industries. AFBI also has an important role on disease control for both plants and animals and is heavily involved with both bovine TB and bovine viral diarrhoea (BVD). However, like every publicly funded body, it is going to have to cut its cloth to match the new reality of decreasing budgets. The role of the ARD Committee will be to ensure that the AFBI budget and work programme is aligned to that of DARD and to the farming and industry priorities. DARD has already told us that it needs to shed around 300 jobs to meet its payroll costs, and AFBI is looking to shed slightly under that figure. Between the two, that is a massive cut in jobs.

When the Committee took evidence from the Minister and her officials in January, she outlined that savings of £29·9 million are required in one financial year. She also outlined her five key priorities. Those priorities are the successful implementation of CAP reform; the implementation of the Going for Growth action plan; the headquarters relocation programme; continued support for the TRPSI programme; and continued investment in flood alleviation work. In this coming year, the Committee will keep a close eye on those five priorities and make sure that the budget is aligned to those priorities.

We will continue to watch and make sure that services are delivered as efficiently and as cost-effectively as possible. For example, I outlined previously concerns that the Committee had around the Northern Ireland food animal information system (NIFAIS) programme. This is a large-scale IT project and its costs, both resource and capital, are substantial. We have had a closed-session briefing on that and had a very frank and open discussion with DARD officials. We also commissioned some research, which helped us to compare and contrast it with similar projects in other countries, including New Zealand and Canada. I cannot speak for the rest of the Committee members, but I feel a little more assured that, despite the high risk factors and the consequence to our industry if it all goes wrong, DARD is working hard to make NIFAIS a success.

As we debate the Budget Bill today, I will finish by saying that we know that hard times are coming, but the Committee will continue to play its part to ensure that the cuts and savings are made in line with priority services and that the front line is protected as much as possible.

Photo of Danny Kinahan Danny Kinahan UUP

I am pleased to be able to speak on the Budget. I am going to speak on education and enterprise, as those are the two fields that I am spokesman for. It is sad though. We really feel that, so often, we do not follow the consensus that was set up in the Belfast/Good Friday Agreement, and so many of the comments that have been made today about the Budget are because one Minister is doing his own thing compared to another. It is sad that we did not make all the cuts when we should have made them four years ago. We should not be going through the agony that we are going through at the moment; it should have been slow pain over four years instead of all in one go.

I will start with education. I very much welcome the £150 million that we moved to the Departments of Health and Education, especially the large sum that went to Education. I congratulate the whole of the education establishment for its strong lobbying, as it battled with its appalling Christmas present. It was told just before Christmas that £78·7 million was going to be taken out of the aggregate schools budget, along with numerous other cuts in early years, earmarked funds, some major capital, some minor capital, and — what really matters to must schools — the maintenance budget, which, I think, was being cut by £13 million. That is what they had to live with through Christmas. Still, today, they have to live with uncertainty, so I hope that the Minister will push his colleagues to try to ensure that that uncertainty stops.

I wonder, when we went through all this before Christmas, before that £150 million came, where was it actually found. Was it really part of the Stormont House Agreement, or was it sitting there? Why did we not give those in health and education some idea of priority — that health and education were the priorities — so that, after Christmas, they had some hope?

Anyway, I must not be too grumbly and should not speak ill. It was good to see that money coming through, but we have not seen any more money since then. There has been one press release, which confirmed that £18 million was going to the aggregate schools budget on 19 January, £2·5 million was going into preschool education, and £2 million was going into education and library board youth schemes. That is all that we have heard. All the schools and everyone in education are still sitting there wondering what is going on. Surely, Minister, there has to be a better way to do this to make sure that people are told what is happening.

The Irish National Teachers' Organisation said last week that 500 jobs could still be lost under the revised budget, so we are still sitting there. Are those 500 jobs to do with the jobs that will be cut back in the Civil Service, or are they 500 jobs that they are still concerned about in schools? We must have clarity. It is unfair on everybody to let this run on and on. There is a complete lack of certainty, and there is no transparency or consistency in how we do things. Schools do not know what is happening in the next few years. They have to work on three-year budgets, yet no one else seems to look more than six months to a year ahead. We need to start to deliver more accurate information to schools.

It is interesting that the Treasury tells us that Northern Ireland, per head of population, receives more for education than any other region in the UK. The following figures are for 2012-13: England £8,529 per head; Wales £9,709 per head; Scotland £10,512 per head; and Northern Ireland £10,876 per head. That is a huge figure and is 24% above the UK average. Where does all that money go? Where is the Treasury getting its figures from? Schools are certainly not seeing it. I hope that, with the new Education Authority, less money will be siphoned off to bureaucracy and more will go to pupils and better education.

One school rang me last week, wondering where its classroom assistant was. They did not know whether to appoint somebody or not. Another school has to change one of its classrooms into a dining room every day, and, even though that is done very swiftly, the school loses teaching time. We need to get so much right in our schools, so I ask the Minister to push hard to get proper budget details down to the schools.

We all know that there is £500 million to help with shared education, but that is only capital. A shared education Bill is coming, yet we are cutting all the other areas that will allow us to promote the sharing of education. Are we really thinking things through properly? At the same time, area planning continues. We are reviewing transport policies and coming up with many more initiatives. We must have a long-term strategy. Will the Minister use his influence, through budgets and other things, to get a joined-up education plan for the future so that people know what is happening?

I am also concerned that, if we are to go ahead with redundancies — voluntary redundancies first — we will lose all the highly skilled and most experienced people in one go. If they are like me and have learned from mistakes in their careers, they learn a great deal. If we lose all those experienced people, we will go through the same mistakes again and again.

I move on to the economy and DETI. I tried to find out whether we could look at the figures being spent on Invest NI and other matters in more detail, but we lost the argument in Committee. Most people said that we need to spend more because of being legally contracted, and it is what brings jobs in. However, you should not give up. We should still look at all the figures all the time to make sure that moneys are being spent properly and efficiently.

We wait for corporation tax to come in. I would love to know whether all the companies to which we have given big sums of money to come here in the last few years knew that corporation tax was coming, or whether there may be more flexibility in the future with corporation tax. If those companies have been given a nice chunk of money to come here, and suddenly they are being given a second whammy with corporation tax, have we budgeted for that, and will less money be given to them?

Also of concern in tourism is that we do not get our fair share from what is happening with the Irish. That is not because we do not get our fair share from the moneys that go to the tourism body but because the Irish do a whole mass of other things — they bring in lower air passenger duty and look at proper railway access to their airport — that have a knock-on effect on our tourism, and we always pay the penalty.

Our tourist figures today show no great increase in the numbers of people staying in Northern Ireland or coming from Great Britain. Yet we have the terrific success of the Titanic centre, and we have had golf and many other things happening, so why are we not getting many more people coming here? I think that it is because we do not yet have a tourism strategy on the ground that works for all of the smaller tourism events. I look at the wonderful Antrim Castle Gardens or at what we could do with Lough Neagh, and I think of the fishermen, anglers, shooters and all the other people who come here. We need a budgeted tourism strategy that feeds all the way down to the people on the ground. We must not have only big events and rely on the trickle-down effect. We have this great little country, so let us make sure that it works, and let us make sure that everything that we do in this Budget helps not just our schools but our whole economy.

Photo of Basil McCrea Basil McCrea NI21 5:00 pm, 16th February 2015

As I rise in this place, it is like death warmed up. It has gone to sleep. The energy has dissipated, and there is paralysis. People —

A Member:

Is that self-analysis?

Photo of Basil McCrea Basil McCrea NI21

I am just trying to tone myself down to get to the same level, Mr Deputy Speaker. I commend you, and I will commend the Minister, because you have had to sit and listen to every single word in the debate. There are a few things that I want to say, and, at 5.00 pm, it probably does not matter because nobody will be listening.

Photo of Ian McCrea Ian McCrea DUP

It is not on the news.

Photo of Basil McCrea Basil McCrea NI21

It will not be on the news, as Mr McCrea rightly points out. The press will have gone home or to the coffee shop. Nobody will care, yet there are really important things that people want to say.

I will make a few general points to the representatives of Sinn Féin. I absolutely acknowledge your mandate. You have every right to say what you want to say, but, having listened to you, I have to tell you this: what I, as someone considered to be different, hear when you make a speech is that you bring up arguments at one end of the spectrum and then, at the very last minute, say that you support the Budget. I think that Michaela Boyle was saying, "We can do it. Yes, we can". It was like Bob the Builder. Where is this sense of optimism coming from? Where is the sense of economic and financial reality about where we are as 1·8 million people on the edge of western Europe? We need to trade and be part of other places. As someone who is happy to engage, I think that we need to have a proper Budget debate.

I will talk about DCAL now. I am on the Committee for Culture, Arts and Leisure, which is, I think, the smallest Committee. I think that I was put on that Committee because people thought that that was where I could do least damage. Let us just see what I can do on this. I believe that DCAL needs a champion. We need people to argue for culture, arts and leisure. It is not the Department for fun. It is not some add-on that we have because other people have it somewhere else.

I listened to Mr Kinahan's finishing words on tourism. We will have tourism, but the Budget that we have here will cut the Ulster Museum, the Folk and Transport Museum and all sorts of things that we could do in tourism. We then say that we will give more money to DETI because it might do something useful on this. I am sure that the Minister would like something to attend to in this speech, so I refer him to the Budget debate on 27 January:

"DCAL is facing an 8·3% resource DEL reduction. It has offered a degree of protection in that context, with the arts having only a 7·1% reduction." — [Official Report, Vol 101, No 4, p67, col 1].

The information that I have in front of me comes from the departmental notes, and, in the draft Budget, there was to be a 10% reduction, which then became 8·2%. The issue is that all the arm's-length bodies, including those for the arts, are now facing an 11·2% reduction, not 7·1%. When I look at the detail that is being brought forward, I see an increase, but the only two organisations that got the benefit of that increase were the Department and NI Screen. I have the documents here, and I am reliably informed that nobody else has such a comprehensive amount of information. Apparently, this is what the Civil Service does to you. When you ask questions, it says, "Here, have a big file. Read it. You will not read to the bottom of it". Well, I did read to the bottom of it, and I see that the Minister of Culture, Arts and Leisure's entire focus apparently is on NI Screen. We have magically secured an increase from £1 million to £1·87 million. I am not against NI Screen. I think that it is a fantastic organisation, but I wonder why we have not tried to deal with some of the other issues. I will see whether I can get some detail here. When I listened to the Chair of the Committee, Nelson McCausland, go through the top-level view and heard him say that we have seen this reduction in this Department, and this amount of percentage decline, it all became a blur, but when you drill down a little bit further, you get to see the things that we are passing.

The point that I made to the Minister in previous discussions is that poor old DCAL gets only £100 million, yet we are taking £10 million off it. It is a drop in the ocean, but wait until you see the effect that that will have. The Arts Council will save £120,000 by reducing salaries, by not replacing leavers or agency staff, by not recruiting students and by offering voluntary redundancy. That is to find £120,000. It will save £104,000 in administration. The impact of that will be a lack of regional spread, instead focusing only on Belfast and Derry. Therefore, I ask those people who argue for rural proofing and rural inclusion and who talk all the time in the Culture, Arts and Leisure Committee about rural issues, where is your defence of trying to make sure that culture, arts and leisure are spread throughout our rural areas?

Where do the real cuts come from? Where are the real cuts in the Arts Council, which we were supposed to be supporting? A total of £1·154 million in direct grants will be cut, and some organisations are likely to cease operating. I know that we did not get the 15% cut — we got only 11·2% — but the previous survey said that we will lose over 500 people from our arts centres.

We then move on to some smaller things that people used to say were quite important to tourism, science and outreach here. The Armagh Observatory and the Armagh Planetarium has to save £177,000. One of the few things that it can do is increase ticket prices by 10%, but then you will be into all sorts of issues around whether it is an internationally recognised scientific centre any longer. You will not get your children going to those places, yet it is part of the core curriculum.

I will look now to National Museums. This is what it means: we will reduce staff by 24 full-time positions with approximate salaries of £36,000 each. The voluntary reduction will cost £1·512 million. That is the cost this year. It is part of the £700 million that Mr Allister was talking about for a resource saving of only £400,000. We are going to strip away our assets in National Museums. We will see the complete closure of the folk gallery at the Ulster Folk and Transport Museum. We will see additional gallery closures in the Ulster Museum. There will be a reduction in outreach activity and special programmes for non-traditional people. We will see cuts in matters that are important to DETI, because National Museums produce three of the top tourist spots in Northern Ireland. We will see cuts that impact on DE and DEL, because it delivers key aspects of the curriculum. We will see cuts in areas that affect DSD, because National Museums NI works to deliver social-inclusion and community-based programmes. We will aim to save £859,000 in a reduction in pay bills through vacancy management. That means that we will leave posts open, we will not fill them and we will see a reduction in service.

What really disappoints me in all this is that the sums of money are so modest. The saving from the Ulster Museum is £43,000, yet you then go and close half of the folk museum. You get £16,000 for the Ulster Folk and Transport Museum and £15,000 for the Ulster American Folk Park in Omagh, which will actually see it cut for four months of the year. All of that is supported by a complete and utter stopping of traditional marketing amounting to £184,000. Now, when everybody else is talking about millions and billions of pounds, I am talking about really small sums of money, which, if we were so minded to protect our core issues, we would be able to find.

I do not know who is making the argument for this. The Minister said previously that I should make the argument to the Minister of Culture, Arts and Leisure. That does not seem to be working, so I am making it to him and this House. I will point out that, when he was talking about the issue in the Budget debate on 27 January, he berated the Ulster Unionist Party. At least now we can see that its opposition to the Budget — unlike other parties, which is to its credit — was that it hinged on less than one quarter of 1% of the total Budget. I am telling you that it was £60 million. All that I am looking for is £10 million, just to keep our arts programme alive and to do what is right for things that unite Northern Ireland.

You get to the issue of what else we will cut: Sport NI. I hear everybody here talking about how great it is about our sports champions and when our boxers do well at the Commonwealth Games. We sing their praises and do all that. What will we do? We will take £23,000 from Tollymore. There will be a reduction in seasonal staff, the number of courses and weekend services — the most popular time. We will take £75,000 out of performance coaching; the removal of the entire funding programme for performance coaching. How will we build our athletes of the future if we do not have coaches? We will take £57,000 out of club development performance. As for Activ8 for children in primary, post-primary and special education, for whom participation in sport is recommended by the Chief Medical Officer, we will take all that funding away as well. The loss will result in Sport NI having zero engagement with the education system. We know that this is not the right way to go forward.

We will also see the Sports Institute Northern Ireland seek a £180,000 reduction in high-performance service to athletes. We currently fund 200 athletes and 25 sports. Both will be reduced, meaning that we are unlikely to see medals at international level. We will also take £138,000 out of performance sport, which is likely to have an impact on participation at the Commonwealth Youth Games in Samoa in 2015. Is that really what we want? When you do surveys of what people are proud of, you find that they are proud of our people in Northern Ireland competing on an international stage. We will take away £44,000, £12,000 of which is from the Giro cycling legacy. We invested in the Giro and now we will not follow it up. We will take away £15,000 from Women in Sport and £16,000 from Disability Sports NI, which will threaten the future of the organisation, according to Disability Sports. I have made my point on where we are making really modest cuts that will have profound effects. The athlete investment programme will face a reduction of £63,000 in training for our expert athletes. A survey of public attitudes found that 90% of people thought that NI teams should have international representation and that 90% of people supported public funding for our young athletes. As a result of the Budget, we will have to stop all funding for the 55 development athletes whom we have identified.

I will finish on the issue of Disability Sports NI. DSNI directly impacts over 20,000 people with disabilities every year. The cuts in the Budget suggest that numbers of people who are part of the programme will be one third lower next year. People tell me that they have had a look at this from a section 75 point of view. This cannot be right; these people need our support. We have had debates in the Assembly, and there was complete agreement two years ago that we should support the work of DSNI. I ask: how do I make a case? How do I implore the Executive or whoever controls the purse strings in this arena? Culture, arts and leisure is not an add-on or bolt-on; it is the very basis of being Northern Irish; it is what makes us proud. It is about our culture and about celebrating what brings us together. I am not talking about high culture but about everything from marching bands to whatever. We ought to be investing in it, not cutting it.

I understand the financial reality that we face in that we have to make some attempt to reduce expenditure. We have to do that because of the area that we work in in the United Kingdom, but I am saying to you that the sums of money are so small for culture, arts and leisure in the monitoring rounds and suchlike. The Minister said on the record that he understands the benefit of legacy work, maintaining investment and so on. I would like us to look again. I am not in a position — you all know this — to bring forward amendments or to change anything. The only thing that I can do is tell you that these are the unintended consequences of the actions that we are taking. On behalf of people from rural places and all those people who make their living from, take enjoyment from or participate in culture, arts and leisure, I ask you to think again.

I will conclude my general remarks, because the Minister told me previously that it would be unreasonable of me to expect him to be in command of the detail of everything for fear of him being a megalomaniac. I accept and understand that point. However, when you drill down into the detail and look at what is there — I do not think that any other Departments have been able to give the information — you get to the stage where you think, "I would not do that; that is not joined-up". There are some areas that I really am interested in. I hope to finish on a positive, and the Minister may well be talking about this. I heard him talk at Question Time about how we might have an investment bank, how we might do more on energy and how we might use our financial transactions capital. All those are positive things, and I commend that, but we need a Budget that we all genuinely agree with. There is no point in people saying, "I disagree with all of this", and then saying, "I will vote for it".

Equally, there is no point in people voting against it on principle when they have no other ideas. You will be pleased to hear that, at twenty minutes past five, when the media has yet to pay any attention and nobody is listening, I have, at least, said some things on the record, which, in the cold light of day when I am not associated with them, people may well take on board and say, "Do you know what? There is something that we should do. We need to find a way forward, and that needs consensus." That is the only way forward in this place. We cannot keep taking potshots at each other: we have to find a way to agree, and when we agree, we should be arguing for it, not making excuses.

Photo of Joe Byrne Joe Byrne Social Democratic and Labour Party 5:15 pm, 16th February 2015

Arising out of the Stormont House proposals, there is a strong emphasis on a voluntary exit scheme (VES) proposal, as has been outlined by many other speakers. The voluntary exit scheme is hailed by some parties as a means of tackling over-reliance on the public sector, but how can it be delivered? There needs to be a skills needs analysis for each Department to sustain viable public services at the delivery end. Otherwise there will be a lot of disappointed people. We are told that the target in the public services should be 20,000 posts — around 10% of the whole sector. Managing that through a voluntary process is a tall order.

In terms of DARD, 300 posts are to be targeted — around 10% of the Department. Again, how will the professional and technical needs be maintained to a sufficient level to provide the quality of service that people expect? It is therefore crucial to have a planned approach to implementation of the VES. That is the challenge for each Department and, in particular, for the Minister who will oversee the process.

The phrase "invest to save", or "borrow to save", is the theme of these public-sector employment cuts. How can this major restructuring project be managed successfully so that rising unemployment is not the headline outcome? It could be an economic disaster for the local economy, leading to a downward spiral in business confidence if there is no consequent improvement in the private sector as we cut the public sector.

Mr Deputy Speaker, where is the evidence of an economic plan for the North in this Budget? The reality is that there is none. That is the biggest gap in the entire Programme for Government, and it is still lacking in the current Budget proposals. It is now more important than ever to have one, if we are going to realise 20,000 job cuts in the public sector.

Northern Ireland has never had a focused, targeted economic plan or policy for the entire region. Regional imbalance has been the order of the day, because of the custom and practice pursued by the public bodies charged with shaping economic development. That is the historical legacy. The infrastructure deficit in the west and border areas highlights the regional imbalance in FDI trends and economic development in general across the North.

Does the Budget provide a focus and a road map to a more successful local economy, or is it primarily about implementing austerity cuts? That is the outstanding question, and I remain to be convinced.

Photo of John McCallister John McCallister UUP

I am reminded at the outset of the old adage about a Government that is in office, but not in power. I think that best sums up this Budget and probably this process. That, to be fair, is not all the Minister's fault, because he is struggling to get Executive colleagues together.

I will make some points about the Budget and the policy direction. We are in a budgetary period without a Programme for Government and any resulting targets or objectives. Looking at the last Programme for Government and how meaningful some of it appeared to be, you might say that it is not a disaster or a bad thing because everybody ignored the last one anyway, but you also have to look at the effect on a Northern Ireland Executive that is at odds with itself. There is a 3:2 split on this Budget. Thankfully, the two are the two bigger parties, and they have the numbers over the three smaller parties who are against it. There is a 4:1 split over Minister Farry's issue on St Mary's and Stranmillis. I am not quite sure about Belfast port, but clearly the Finance Minister is at odds with the Minister with responsibility for the ports. We had a broad 3:2 split on welfare reform, with the two being mainly the SDLP and the Ulster Unionists.

When it comes to Transforming Your Care and the Donaldson report, I am not quite sure where we are on any of that, whether we are going to deliver full steam ahead on Transforming Your Care or whether some parties are now opposed to that. There is probably broadly a 3:2 split on the voluntary exit scheme; I am not quite sure where some of the parties are on that. That has always been the difficulty that this Minister has faced, because he does not have a united Executive.

Let us look at some of the policies, such as the voluntary exit scheme. It was agreed at Stormont Castle or Stormont House — or maybe even both — and then some people suddenly realised that this was not where they wanted to go. My biggest concern over the scheme, and welfare reform, is the broad acknowledgment that this Executive are only doing these reforms under pressure from Westminster. Where is the vision and strategic direction of this Executive? Where are they going and where are they leading Northern Ireland to? The broad parts of the policies do not add up to make a complete and coherent Executive with a direction. The key aspects of economic policy and welfare reform do not add up.

Let us look at where we are on other strategic parts of public-sector reform, such as TYC, local government reform, education, DARD headquarters and reducing the number of Departments. As the Minister is aware, I have asked him to publish a strategy on the voluntary exit scheme linked with a strategic plan for public-sector reform. I have yet to receive an answer but I am sure he will reply in his winding-up speech.

We have proceeded with welfare reform only because of pressure from Westminster. The resultant cost of that is £565 million over six years. How is that going to be paid for? Again, we have set the bar at defending budgets rather than looking at outcomes. We have not been told how this is going to be paid for or where the money is coming from. The Minister must know that this is not a zero-sum equation.

The danger for him is that this money will have to come from education, health, social investment and employment and learning. We may find that with an incoherent Executive policy on welfare and the economy we are robbing the very services that might help people to get out of the trap of welfare and move into the world of work; those training and employment opportunities that this Executive will have to cut. In attempting to address health inequalities we will struggle to meet the demand. That is where this Executive, in this Budget, fail so dramatically because there is no joined-up purpose to this Administration.

Remarkably, corporation tax is the one policy on which there is a 5:0 agreement around the Executive table. All the studies that we have looked at on corporation tax suggest that to get the gain from it we have to invest in skills and training, yet DEL is facing a 6·4% cut next year. Where is the joined-up approach of the Government? Where are we going to create these jobs?

During the welfare reform debate last week, I asked whether Sinn Féin had now forgotten about social mobility for some of its constituents. I also asked whether it had moved into the area of trickle-down economics because a cut in corporation tax has a long way to trickle down to some of its constituents. That is the problem that this Budget is delivering and this Minister faces.

We hear much about strategic vision. Mr Allister made the point that OFMDFM did not quite see the irony in having an equality and strategy unit. That is because there is no sense of strategic direction. Take even one Minister making a funding decision about Stranmillis and St Mary's, and then all the Executive closing down. What is worse, that Minister is still in post. He is still there, clinging on to office, and that builds into the First Minister's line about the dysfunctionality of this place and this Executive. We cannot continue in that vein.

The problem is that key parts of this Executive's policies do not add up. The economic policy of the Executive is incoherent. The public-sector reform policy is incoherent. The social policy is incoherent. Our health policy is incoherent. Our fiscal policy, to borrow and pledge spending with no indication of where the cuts are going to come, is completely incoherent.

(Mr Deputy Speaker [Mr Beggs] in the Chair)

Can the Minister stand up when he replies here and claim that it has been a great achievement? He will claim that it has been a great achievement getting Executive agreement on this and that the public should be grateful to him for that. The only reason why he and his colleagues are getting away with this is because there is no credible alternative in this Assembly. There is no opposition, and that is why this Assembly so desperately needs an opposition and alternative view. Quite frankly, the people out there have long-since switched off from this debate and what this Assembly does.

Even Sinn Féin have taken their hollow rhetoric to breathtaking new levels. Northern Ireland and your constituencies, as well as my constituency, have been bankrolled by a very generous UK Exchequer and taxpayer. Let us look at this notion that Sinn Féin have been pushing about the Union being the price of austerity. I am sure that the Minister will give as accurate a figure as he can of what the subvention currently rests at. If it is in the region of £9·5 billion to £10 billion, that comes very close to the entire income tax take of the Republic of Ireland, so where do Sinn Féin think in the real world that that money would come from? If we were not part of the UK and getting a generous handout from the UK Exchequer, how do they think we would prop up our National Health Service, our schools or our roads infrastructure? Where do they think in la-la land that we would get that money? Where do they think the Finance Minister would get that money?

It is just incoherent nonsense to think that we join this all-Ireland republic and it will somehow be blissful and easy. Our friends and colleagues in the Republic of Ireland have had to take some real pain in the last seven to eight years — real pain that we have largely been shielded from. If you look at even public-sector reform and job losses between 2010-13, the UK average was a cut of 10%. Northern Ireland was 3·5%, so where do they think any of that would come from? I am not quite sure.

Add up some of the figures. Take £70 million per year on welfare reform. At some point, this Minister is going to move, and his colleague beside him will cut corporation tax at a cost of £325 million. That starts to rise to £400 million per year. At a time when the Minister has been warning us that we are in for a difficult period in this coming Budget and in the years to 2020, how do those two things add up?

This at a time when we are cutting our skills budget, topping up welfare payments and possibly trapping people in welfare and more. This at a time when we cannot make any decisions due to an inability to make decisions. When we listen to the likes of Mr Flanagan talk about the blank canvas for our economy, we find that he means a blank cheque, not a blank canvas. He wants a blank cheque that we can write and spend, which means that we never have to face the realities of what is out there in the real world. The realities are that, if you want to spend money at that level, you will have to raise it at some point. The Minister knows that I have been critical of the DUP line that says that we are a low-tax Assembly. We are virtually a no-tax Assembly. Five per cent to 6% of what the Minister will spend comes from his regional rate. So we are imposing no charge; everything else goes into a central pot and comes back to us in the form of the block grant and other separate payments.

The idea that this is a low-tax Assembly does not stand up to scrutiny. The idea that anyone would somehow want to pay more into such a dysfunctional body is also a worry. To the Alliance Party's credit, it talks about having the debate on revenue raising, putting tuition fees on the table, water charges and prescription charges. It is a debate that the Assembly needs to have. However, it needs to have it in the context of a reformed Assembly, which should be an Assembly that has a coherent Executive policy on welfare, the economy and on where it is going. People should know what it is doing. In that context, you might make those decisions.

Talking about revenue raising brings me to the Port of Belfast and the debate on that. We can look at that as one of the best examples of growth in our economy, which even John Simpson described as an "artery" for our economy. Minister Hamilton and Minister Kennedy were interviewed for 'The View' last Thursday night, and instead of having an Executive policy and strategy, they had diverging views of where the port is going. Why would we want to strip, I do not know, £800 million with no clue about the Executive's ability to deal with it, get on top of the issues, spend the money properly and invest wisely in Northern Ireland's future? At the minute, all we see is an ability to borrow. You might argue that we should be able to borrow if we are going to cut corporation tax, and you probably need to be able to borrow to match the volatility of that tax. You would also need to be able to save in better years. However, what are we borrowing mainly to do? We are not borrowing mainly to build roads and infrastructure, to extend our rail network, to build schools and health centres or to do whatever is needed for the Executive's strategic plan. We are borrowing to make people redundant.

The Minister knows my concerns on that about getting a policy, and he knows that we could end up with a brain drain. He also knows that we could end up doing something similar to the Patten reforms of the Police Service, when you could end up having to bring people back in who know how things work. We end up at Mr Allister's point about economic inactivity. This is where these parts of our economy and economic vision, with Sinn Féin's idea on welfare reform and the Minister's idea and drive on public-sector reform, do not add up to a coherent policy with associated costs. That is where we get into trouble, and we always end up defending the Budget line rather than looking at outcomes. We end up saving St Mary's and Stranmillis colleges, continuing to train too many teachers while not having enough IT graduates. Where is the joined-up economic policy in that?

The private and public sectors are mentioned. Even in my constituency, the centre in Tollymore is a great asset, but it is funded and continues to be funded by the public sector, offsetting private sector activity. That needs to be looked at when we consider how things should continue.

We look at various policies, such as what is in the Budget for delivering anything on the Maze site. Will it be a hub for agri-excellence? Would it not be better to think about relocating DARD headquarters there? Is the new community safety college too big and too difficult for us to deliver? Does some other venue need to be looked at? Meanwhile, we are spending millions looking at these ventures with no collective government policy.

We come back to the simple point that the Executive or the Assembly must reform the process or it will fail. Mr Allister quite rightly made the point that the Budget buys the Executive and the Assembly time through to May 2016. It has bought the full five-year term. However, the challenge after this Budget is that whoever is elected here in 2016 cannot come back to this unreformed Assembly and unreformed Executive and try to deliver a Programme for Government. It cannot be a Government with no real ideas other than what is being driven by a Westminster Government, whatever colour that happens to be, with no real incentive or motivation to do anything and with nothing more than the mutual veto hanging over it. We cannot continue to do business in that way as our people switch off from politics and the Assembly. We have looked at this too many times. There is no revenue raising, no way of changing it and no drive or ability to deliver, and we keep on doing it.

During one of the previous debates, when the Minister was in great quoting form, I quoted JFK to him:

"Efforts and courage are not enough without purpose and direction."

The challenge that I put to the Minister on that day was to show me where his purpose and direction and that of his Executive colleagues was. I am not seeing that purpose and direction. I would like to be able to see a coherent Executive that is joined up with purpose and direction and an ability to lead, govern and serve in the best interests of us all. Quite frankly, I do not see that in the Budget and that is very much to my regret.

Photo of Simon Hamilton Simon Hamilton DUP 5:30 pm, 16th February 2015

Mr Deputy Speaker, you are now the fourth Chair of the debate. Mr Basil McCrea congratulated the Deputy Speaker last in the Chair for his longevity. I have had to sit here through the entire debate while the Chair has had the luxury of changing.

I thank Members —

Photo of Jim Allister Jim Allister Traditional Unionist Voice

I said that now we have to sit.

Photo of Simon Hamilton Simon Hamilton DUP

You have to endure it. It is payback time, Mr Allister.

I thank Members who contributed to the Second Stage of the Budget Bill. As I did in my opening remarks, I want to place on record my thanks to the Committee for Finance and Personnel for ensuring accelerated passage, which means, of course, that the tight legislative timetable can be adhered to at this critical point in the financial cycle.

Many issues have been covered in the debate. Some Members clearly heard my opening remarks about keeping their speech focused on the Budget Bill, but I think that only one Member did so. It is safe to say — it is probably the safest thing that I will say in the Chamber — that some Members may have strayed somewhat beyond the specifics of the Bill.

Photo of Simon Hamilton Simon Hamilton DUP

I know that it shocks many Members to learn that. I appreciate the time that Members have given to the Bill and the debate, and I will do my very best to respond to as many of the issues raised as possible, although, given that we would all like to get home for some form of tea at some stage, I will not respond to every issue raised.

I start with the Chair of the Finance Committee, Mr McKay. I thank him for his work in that capacity and for ensuring that accelerated passage was secured. I think that he spoke on behalf of the Committee when he said that there was a "fundamental weakness" in our budgetary process and begged the question of whether it was "effective or efficient". Those are questions and points that I have considered many times. We at least had the benefit — it is a dubious benefit — of having a week between the debate on the Estimates and the debate on the Second Stage of the Budget Bill.

Usually, we do them back to back, on a Monday and a Tuesday. In retrospect, the benefit of doing it that way is that energy is sapped from Members on the Monday, and, consequently, the debate on the Tuesday is usually much shorter than this has been. It seems that the week that has passed has reinvigorated Members, so we have had to endure probably a longer debate than we might have had to in the past.

Mr Cree is not here. He is usually the first to raise this issue during these debates, and all Members who do so are absolutely right. I inherited a review of the financial process that had been taken forward by my predecessor. It was probably not initially perfect, but it was amended to reflect various concerns raised by the Minister for Regional Development and the Minister of Education. Changes were made to try to reflect their concerns.

Reflecting on the final points made by Mr McCallister, about the operation of the Executive, I can say that the paper before the Executive that is the longest outstanding is that on the review of the financial process, and the party that is holding it up is Sinn Féin. It is probably now too late for that review to go through as it is, and it may not even be required to go through as it is currently crafted. The reorganisation of Departments from 12 down to nine probably requires us to change the financial process somewhat anyway, because there will be fewer Departments. That therefore gives us another opportunity before this mandate is out. Mr McKay made the point about whether it is an effective or efficient process, so I hope that he takes time to reflect on the fact that it is his party that has refused to let the review of the financial process proceed.

The memorandum of understanding between the Committee and the Department would not, of course, have decreased the number of debates that we have had this year. I am content for work on it to resume, but, if the experience of the past year is indicative of anything, it is that the memorandum of understanding would not have worked in the circumstances that we have. I do not think that the memorandum was fit for purpose to have been engaged in this Budget process. I think that the process would have collapsed and fallen apart fairly quickly.

It is useful for us to be able to reflect on the Budget process this year, try to tweak or change the memorandum of understanding accordingly and then, hopefully, get the MOU in place for next year. However, for it to work, it obviously has to adhere to certain timetabling issues and, as the Chair and Committee members will appreciate, that is somewhat outside my control. If there is not political agreement to move forward on the Budget at all — never mind within certain preordained stages in time — the memorandum of understanding, even with the best will in the world, will not work in many regards.

Mr McKay mentioned the Smith commission and further fiscal devolution. There are a couple of points that I want to touch on there. One is to do with the Crown Estate. That is something that is contained in the Smith commission report as a recommendation for the Scottish Government, and one that they are keen to take forward. Although it would have little or nothing to do with my Department's policy responsibility, I see merit in exploring that proposed power further to see whether it is something that could reap a benefit for Northern Ireland into the future. I say that without having studied the report particularly and without looking at whether there are downsides to it. I tend to view Treasury offers of the devolution of things with that perspective. There are opportunities, and I can see some particularly for our renewables sector and our fishing sector that might be huge for Northern Ireland. It is a matter on which I very much have an open mind.

The Member has frequently raised the issue of APD. As the House knows, we already have devolved APD for direct long-haul flights. That is kept in place, albeit on a reduced service now. There is the United Airlines flight to Newark, and some other long-haul flights have been added, albeit most of them are to outward tourist destinations. The argument made by the Member, and by some others, although I think that the number is decreasing, is that we should extend the devolution of APD to short-haul flights. My stated position, and it remains the case, is that it is an issue for Her Majesty's Government to deal with, but I think that they should eradicate it. I think it is punitive to remoter parts of the United Kingdom, particularly to Northern Ireland, which shares a land border with the Irish Republic, where there is effectively no tax on flights in the same way that there is in Northern Ireland.

However, we should acknowledge the good work that has been done in attracting new routes to Northern Ireland, particularly recently, even without having no or a reduced rate of APD for short-haul flights. In the last months, for example, daily routes to Amsterdam by KLM have been announced; the Flybe flight to London City was introduced and then extended to two flights a day; and flights to Verona, Rome, Prague and now Barcelona have been announced. Some of those will be more for outward tourism, but some, such as those to Rome, Prague, Barcelona and Amsterdam, will bring tourists back in the other direction as well. Those are the sorts of routes that I want to see us increasingly getting. Get into bigger markets, cities and hub airports, yes, but I also want to see routes to where the resident population might want to come in this direction as well. My concern around APD for short-haul flights has always been that, if it was reduced, it would also be reduced for many of the holiday routes to the Mediterranean, the Canary Islands and elsewhere, which would take money out of Northern Ireland and not bring money back into Northern Ireland.

Mr McKay and Mr Flanagan raised the issue of rates, and did so on the back of the revaluation, which is starting to roll out. I make the point, as I have in a lot of correspondence to Members and in various press utterances, that the revaluation is not itself the rates bill. It is to do with the net annual value (NAV) and the valuation of the property. Councils are in the process of setting their rates and we have struck a low increase in the regional rate of 1·4%. It will be only when that is worked through that an increase in the valuation will be reflected in an increase in the rates bill as well.

Mr McKay is right: it is a long time since we have had a revaluation; 13 years, in fact. There were very valid reasons for postponing the previous revaluation, which was due to go ahead a couple of years ago. Such was the lack of movement within the market that it may have produced very distorted results, which would have been appealed by probably the vast majority of people and ended up in a significant increase in work for our valuation teams. I do think that the concerns expressed by some — a small number of people have expressed concerns about their valuation — is a reflection of the fact that their valuation has gone from here to there and they see that as one move, as opposed to perhaps happening over a 13- to 15-year period. It is important that we get back, very, very quickly, to regular five-year revaluations, almost come what may and despite the circumstances in the wider economy.

Again, I make the point that the whole purpose of a revaluation is not to increase the overall take on rates; it is to smooth that out and for a fairer distribution of the rating liability across businesses. There will be some winners; there will be some losers; and there will be some who remain the same. Glyn Roberts, chief executive of the Northern Ireland Independent Retail Trade Association, spoke for the majority of non-domestic ratepayers when he welcomed the outcome of the rates revaluation and said that it represented good news for independent retailers and town centres. That sentiment was shared by a Sinn Féin councillor Mr Jay McCauley, from the Strabane area, who was quoted back in November as saying that the revaluation — he said "re-evaluation", but I have polished it up for him — would:

"help to create a more level playing field in terms of the rates burden and give a long-overdue boost to many small struggling businesses and enable them to survive and possibly grow".

The small business rate relief scheme has been extended for a further year. That will offer some support, particularly for smaller businesses, which may see their rates go up as a result of the revaluation. There have been comments by some Sinn Féin Members over the last week or so, including by Mr McKay and Mr Flanagan, of the need to review the non-domestic rating system in Northern Ireland. I stood in the Chamber, having been not long in office, and made the point that, after we went through the range of changes that are happening to the rating system this year — RPA; rates convergence; the revaluation — and that had all settled down and bedded in, it would be an opportune moment for that, because it would be almost 10 years since the last review of the non-domestic rating system. That will be carried out very, very soon.

I enter into that with no preconceived conclusions, but I appreciate fully that it will be a challenging undertaking to find an alternative system that is better than the current one. I am not arguing that our rating system is in any way perfect, but, perhaps, one of its benefits is that it is at least understood. Far from perfect as it is, people at least understand how it works.

Photo of Daithí McKay Daithí McKay Sinn Féin

Will the Minister elaborate on what he means by "very, very soon"?

Photo of Simon Hamilton Simon Hamilton DUP

I mean that we will start it off in this calendar year. It will take some time to work it through. If there was a recommendation for change, it will take some time to work that through the system, whatever way it is done. I say this having no preconceived conclusions about what the results should be, but I have heard it suggested by colleagues of his that, perhaps, it should be based on audited accounts. Not every business in Northern Ireland meets the threshold to have audited accounts, so that does not work for every business. I have also heard it suggested by some of his party colleagues that we should use VAT returns as the basis upon which, somehow, we assess the taxation bill for local businesses. Not every business in Northern Ireland pays rates — sorry, VAT. Sometimes not every business pays rates either, but not every business pays VAT, so that is not a sound basis upon which to do it either.

One of the other downsides of moving away from rates is that, with rates, there is a lack of volatility in the take-in. That said, it has gone down. Since some businesses have not been able to pay in recent times, because of the crisis, it has, perhaps, not been as much as we might have expected, but you do not get the same volatility as there is in sales taxes or taxes that are based on income, profit or whatever it might be. Imperfect as the rates system is — I accept that — there are downsides. Therefore there would be losers in moving away from a system that is at least well understood.

I turn now to the Deputy Chair of the Committee, Dominic Bradley. I want to correct several inaccuracies made by Mr Bradley in his contribution. He said that the basis of any Budget should be an agreed Programme for Government. The SDLP said that there was no agreed Programme for Government. There is an agreed Programme for Government. The Budget Bill before us tidies up the end of the current financial year that we remain in. That is clearly covered by the agreed Programme for Government that, when it was designed, was due to conclude in the 2014-15 financial year. It will be extended by the Executive. The Executive have agreed to extend the Programme for Government, build upon many of the commitments that are there, and add to them with new commitments. That work will be done on the basis of new Budgets, because, obviously, the Budget has an impact on Departments' ability to meet targets or to stretch them further.

Mr Bradley also asked what the rationale was for a reduction in the rates support grant to local government. That, of course, is a question, not for me, but the SDLP's Minister, Mark Durkan. He should be asked why he took a decision to reduce the rates support grant. I believe that he played politics in doing so. He has full policy responsibility for the rates support grant; it is not my responsibility. I appreciate that the Minister, like many Ministers, has a budget cut to deal with, but it is up to him to prioritise his budget. It is significant, I believe, that, in November, he published draft rates supporting grant levels for local government but did not change one iota between draft and final budget. In my view, no serious effort was made by the Minister to do anything to offer additional support for local government. So, when Mr Bradley asks what the rationale for the reduction is, he would be better asking his colleague.

Mr Leslie Cree is not here. In a break with modern tradition, I do not think that he asked about a review of the financial process. He asked about a range of things around the £50 million for shared and integrated education and the money that was allocated in the Stormont House Agreement for the past. He will note, as will Members, that, in the Budget for next year, that is not specifically allocated to any Department at this stage, because decisions are required on the bodies that will deal with the past and on shared and integrated education. There needs to be agreement between ourselves and Her Majesty's Government about those projects as they move forward. As they are agreed, those projects will require the release of funding, and that will go into the Department of Education's budget as appropriate. He asked about the voluntary exit scheme and whether there was going to be any delay. There is no delay. I think that some of the comments I made during Question Time will have have leapfrogged his query. As I said at that time, it is opening on 2 March and is only one of several strategic personnel interventions that we plan to do.

With regard to his comments about the Port of Belfast, that is an issue that his own party colleague, the Minister for Regional Development, is responsible for. Whilst I am touching on the Port of Belfast, Mr McCallister referred to it in some of his final remarks. I am not sure what he thought the differences were in the views expressed by me and Minister Kennedy. I think that the real difference in views around the sale of the Port of Belfast is not so much between me and Danny Kennedy; I believe it is between Mr Kennedy and his party leader, Mr Nesbitt. In the 'Belfast Telegraph' on 17 December, Mr Nesbitt confirmed that the sale of the harbour had been proposed by his party during the Stormont House talks process. Yet, last week, on the aforementioned 'The View' on the BBC, Mr Kennedy said that he was "not inclined" to support the sale or privatisation of Belfast harbour. If there is a difference in opinion anywhere, it is less between me and Mr Kennedy and more between Mr Kennedy and his own party leader. However, as the Member will appreciate perhaps better than anyone, no difference there.

I have stoked those fires, as I did in the past. For what it is worth and to make my position clear, our Budget next year or in future years will not be predicated on the need to sell the port and get a receipt from its sale. There would be a large receipt to be had from the sale of the port, and that makes it attractive to examine, but as many commentators and I have made clear, whilst there would be a large receipt from the sale of the port, the port is an economic driver in Northern Ireland, and that is a factor that you would have to consider in moving towards any sale.

I do not think that it has to be just an issue between keeping the port in broad public hands and selling it. I think that there are other options short of a sale that we should also consider. I hope that the Minister, in the proposals that he has yet to bring to the Executive to create a panel to look at that, might want to consider that there are other option hybrids between those that might realise ongoing receipts for the Executive short of selling the port and putting it into private hands.

Mr Cree asked for an update on INTERREG funding. Our INTERREG programme was agreed by the European Commission as recently as Friday, and the fund has £282 million in it, which will be spent on areas including research and innovation, environmental protection, sustainable transport and health. It is hoped that by the spring or at least the early summer INTERREG IVa will be open to calls.

Trevor Lunn criticised the Budget and said that it did not deal with financial problems or the financial issues that the Executive are facing. I disagree, and you would expect me to do so. It is a balanced Budget. It was a requirement that we had a balanced long-term sustainable Budget or there would have been no proceeding with the legislation on corporation tax. That, and progress on welfare reform, was a condition. I appreciate that the Budget is not to everyone's satisfaction, but it is a balanced Budget and it is getting us back on to a longer-term and more sustainable footing, and that is being endorsed by the actions of Her Majesty's Government in taking forward corporation tax legislation. It, at least, begins to deal with some of our longer-term financial problems by focusing on workforce restructuring and enabling that to happen, and on reorganising our Departments and reforming our public sector, particularly through the likes of the Organisation for Economic Co-operation and Development's (OECD's) review.

Mr Lunn asked what the Budget was doing in respect of preparing for corporation tax. There is ongoing preparation in terms of investment in skills, infrastructure and economic development. Of course, there is no need to address the cost issue in next year's Budget. There are still a number of what could be described as uncertainties around corporation tax and its cost.

Before some people jump down my throat and say, "Well, if there are uncertainties, that is why you shouldn't proceed with the devolution of corporation tax," I want to point out that these are uncertainties that will only become more certain in the next number of years. One is what the next comprehensive spending review means for Northern Ireland. Like many of us, I am observing the utterances coming from the Conservative Party and the Labour Party about what they propose to do with various areas of public spending. Each time, they try to outdo one another, one by protecting health in cash terms, and then the other wants to protect it in real terms. The next day they want to protect education spending in cash terms, and the next day, another party outdoes them by wanting to protect it in real terms.

The net effect of all of that for Northern Ireland is actually quite positive. Sixty-five per cent of our Budget is spent on health and education, and we get almost full comparability. That means that, if that is what happens after the next election, whoever is in Downing Street, it is good for Northern Ireland. It might put our public spending in a somewhat better position than perhaps we might have feared. I am not saying it is going to be easy, by any means. There will be challenges ahead, but if those promises are fulfilled after the election, it could have beneficial outcomes for Northern Ireland. There are still areas of negotiation, particularly around the ongoing adjustment formula for corporation tax.

Another uncertainty, I suppose, if you want to use that word, is the savings that we will realise through the voluntary exit scheme. Whilst we do not have to deal with the cost issue right now, we have some time to prepare, and there will be some things that I believe will work out beneficially for Northern Ireland.

Mr Lunn criticised allocations to the Health Department; I point out again that health and education account for 65% of our total Budget. Health alone is 46% of our Budget. As an Executive, we have sought to increase, and agreed to increase, our budget for health by £204 million, which is over 3% of an increase. I agree with Mr Lunn that the Health Department still requires reform, but the points made by Mr Weir are worth bearing in mind. The pressures that our health service is facing — and undoubtedly it is facing pressures — are not just pressures that are being faced in Northern Ireland. These are pressures that are happening elsewhere in the United Kingdom, that are being faced in the Republic of Ireland and, arguably, that every Western Government is facing in terms of difficulties in funding, need and demand in health.

Not too many people spoke about health spending today, but while Mr Lunn talked about the need for reform — and he is absolutely right that there is a need for reform in the health service — whenever the Minister comes forward with any number of different reforms, those who call upon him to introduce reforms are very rarely standing behind him, backing his reforms. They are usually standing in front of him with a placard, protesting against the reforms. I can probably include several party colleagues in that. In asking the Minister to bring forward reforms, we all have a responsibility to try to support him and those in the NHS more as they do try to reform in what is a very difficult set of circumstances.

I turn to Michaela Boyle's contribution. I am not picking on her, but the comments that she made were pretty typical of comments made from Sinn Féin Benches throughout the debate. It is not a personal attack on her. Sorry, I have prefaced it by saying "attack"; I should not say that. It is not a personal critique of her comments. It is a critique of Sinn Féin comments more broadly.

She talked about an over-estimation of the fiscal deficit — a point that was picked up by several Members in the corner, principally Mr McCrea and Mr McCallister. This is a fundamental issue: what is the subvention, the fiscal gap, or the fiscal deficit? Sinn Féin's stated position is that it does not believe the figures that are put out there showing that there is a subvention. The most recent figure in the net fiscal balance report is that it is £9·5 billion. If I was to not believe those figures but believe the Sinn Féin position that that figure is wrong, it begs the question of what Sinn Féin believes the fiscal deficit is. Does it believe that there is a fiscal deficit? I am not even sure whether it believes that there is a fiscal deficit. If it does not believe that, there is something seriously wrong with the position that it is espousing.

Accepting, as most of us do, that there is a fiscal deficit, some of us believe the figures in the net fiscal balance report. Perhaps some others do not, but most people accept and agree that there is a fiscal deficit. It is important that we accept that there is a gap, because it goes to the heart of the other points that Ms Boyle and others on the Sinn Féin Benches were making.

Sinn Féin Members got up one after another and talked about the need for more and more fiscal devolution and for it to happen almost immediately. As long as the corporation tax debate has gone on, we have tried to be very careful to say that one fiscal devolution — in this case corporation tax, which is fairly significant — is not in itself a panacea to all our economic ills and is not the silver bullet that will solve our economy, but the Sinn Féin position seems to be that outright, almost immediate fiscal devolution is the panacea for all our economic ills. I am not, and nor is my party, against further fiscal devolution, and we pursued the devolution of corporation tax aggressively.

Some Members wanted us to move on to plan B. I recall that the deputy First Minister, who is from the Member's party, came out of a meeting in Downing Street stating his belief that the devolution of corporation tax would never happen. Some of us got stuck in and kept at it, and we have now secured the power to lower the rate of corporation tax. You cannot question my commitment or my party colleagues' commitment to further fiscal devolution as long as it has a defined economic and social benefit for Northern Ireland. I do not think that anybody — well, there are some — doubts the case with corporation tax. It is not a point of principle that we are against further fiscal devolution because we are part of the unitary state of the United Kingdom. We have devolved APD as well as pursuing corporation tax.

Photo of Daithí McKay Daithí McKay Sinn Féin

The Minister mentioned the deficit. It has been quite clear from the Finance Committee's work that a number of witnesses from universities and other institutions are saying that we do not have enough financial information to know that these figures are accurate. You talk about the deficit being £9·6 billion, and different figures are bandied about. We cannot be assured that the figures are accurate, because we do not have the information in front of us. Other countries do things differently and have accurate information. There is no doubt that there is a deficit, but, unless you have the economic levers to generate more wealth for the society that we live in and set policy in our primary interest, you will not overturn that deficit. You are in a vicious cycle of a deficit that will not be overturned.

Photo of Simon Hamilton Simon Hamilton DUP

The Member's contribution shows some progress in that he accepts that there is a deficit. That deficit is not £1, £100, £1,000 or £1 million; we are talking about billions of pounds. If Mr McCrea's contribution was not going to make the media, I can be absolutely certain that my contribution on the 'Net Fiscal Balance Report' will not make the media. The methodology applied to produce that report is similar to that used by the Scottish Government for their equivalent report. It has ONS status, and ours does not. If it is based largely on the same methodology, it is capable of getting ONS status, should we wish to pursue it.

Photo of Basil McCrea Basil McCrea NI21

I wonder whether we should take the argument from a different position. Maybe not now but at some stage, we have to look at the amount of revenue that Her Majesty's Government raise from the City of London and the contribution that it makes. There is also the polarisation of tax-paying corporations' headquarters in London. If you take it from that basis, it is impossible that we, as a peripheral region, can be self-sustaining. Frankly, this is what really makes me depressed when I hear arguments that are not based on sound economic fact. I want some way to be able to challenge the issue and get it sorted. Once the facts are established, you can decide your policy.

Photo of Simon Hamilton Simon Hamilton DUP

The Member is right about the huge benefit of the City of London to the UK as a whole, even with all its problems over the last number of years. It highlights the problem for a state such as ours, particularly given that Northern Ireland is peripheral to London and the south-east, which are huge drivers for the economy. The same is true, of course, in the Irish Republic, in that Dublin is a huge city that dominates the Irish economy. It offers a subvention through its wealth to places like Kerry, Donegal, the west of Ireland and many parts of the midlands.

So, that is not unusual. Clearly, you would not want that to be the case if you could wave a magic wand, but it is a reality of many states. The same is true in France and Germany and anywhere around the world that you want to look at.

I want to reiterate the point that my position is not one of opposition to further fiscal devolution. By backing consistently the devolution of corporation tax and now securing that power, my party and I have shown that, in the right sets of circumstances, we are in favour of the further devolution of fiscal powers to this place. That gives us more of the economic power or levers that Members of Sinn Féin were talking about, and it will have a beneficial impact on our economy.

Full fiscal devolution, which, I think, is what is being advocated by Sinn Féin, and very quickly, runs the risk of huge volatility in tax receipts and, therefore, less public spending. Somebody may bounce up and say, "That is the case with corporation tax as well". I think that there is a risk of volatility, but I do not think that it is anywhere near as big or dangerous a risk as the volatility that there would inevitably be if you had income tax, National Insurance and all these other taxes as well. That is why I make the point about the deficit. It is important that Sinn Féin accepts that there is a multibillion-pound deficit. We modify the methodologies that we use, and we can look at those further to try to get more accurate figures, but I sense that that will always produce a result that shows a multibillion-pound deficit and a multibillion-pound subvention, and, of course, that argument does not suit Sinn Féin. Therefore, I believe that it will never accept the methodology underpinning any of the work done on that.

Photo of Joe Byrne Joe Byrne Social Democratic and Labour Party 6:15 pm, 16th February 2015

I appreciate the Minister giving way. Does the Minister believe that the regional economy can be made economically viable or sustainable in the medium to long term, given the subvention of £9 billion plus or minus £1 billion? Given that we will get corporation tax, which may be a net cost in the short term, will we be able to proceed and hold the economy together without a strategic economic plan? If corporation tax leads to a recovery in the private sector, the Treasury will be the net beneficiary through increased income tax receipts, increased VAT receipts and a reduction in the welfare payments to the region.

Photo of Simon Hamilton Simon Hamilton DUP

The Member has reiterated the point that he raised in his contribution about the lack of an economic plan. The Executive have agreed an economic strategy, which his party, through its representation on the Executive, has signed up to. So, there is an economic strategy that takes us up to 2030. The first point in the Member's intervention gets to the nub of what I am trying to discuss: how long would it take to become a place that can stand on its own two feet, whether in the medium or long term? Some people's idea of medium and long term is different from that of others, of course. My belief is that that is what we ought to strive for and what we are striving for. That is what our economic strategy is about. That is what devolving powers on corporation tax to try to transform our economy is all about. We are trying to close the gap.

In recent times, the only two periods when we significantly closed the productivity gap were when there were huge injections of public spending into Northern Ireland. That will clearly not happen in the short term, never mind what the medium term might hold, so we will have to do things differently. That is why we have been pursuing the economic strategy and pursuing corporation tax. The subvention, which, the Member accepts, is sizeable, means that we should be cautious about full fiscal devolution. We run the very serious risk of huge volatility and huge reductions in the public spending that, in the short to medium term, we would be very reliant on. Put simply, at this minute, the Northern Ireland tax base is not strong enough to sustain that.

We do not compare favourably with, for example, our neighbours in Scotland. When pursuing more and more fiscal devolution, they do so on the basis of an economy that may be going through issues with the price of oil and went through issues in the past with the financial services sector, but is in a much stronger position economically than we are. Therefore, I believe that it can deal with more than we can. In the past, I have compared this with children growing up. Scotland is a child of about five and we are a child of one and a half, yet some propose that we take the stabilisers off our bikes at exactly the same time. The five-year-old will cope a little better. The one-and-a-half-year-old will fall over. That is where we need to be very careful.

Photo of Basil McCrea Basil McCrea NI21

I thank the Minister for giving way. I will not detain him too long. I would just like it on the record that income tax and VAT are likely to be bigger and more stable than corporation tax. You could argue that, in looking at it the round, there would be a balancing act involved. I will conclude by saying that the Minister is right to look at it before jumping straight into things. It is something to bear in mind. It is important that we understand where the volatility really lies.

Photo of Simon Hamilton Simon Hamilton DUP

I remember having a debate with the Member in the past about income tax and its volatility. Volatility in percentage is smaller, but, because it is a bigger take, the percentage is worth more. The solidity of public spending moving forward is where the problem lies.

I thought that Ms Boyle's contribution was an interesting one, as indeed were those of many of her colleagues. The picture of Northern Ireland that they were painting was one of huge strengths in the economy. That is not something that I am used to hearing from the Sinn Féin Benches, but I agree with it nonetheless. It is undoubtedly the case that we have a lot of strengths in our economy that have been enhanced, improved or, indeed, started and encouraged as a result of policies that were pursued by the Executive and various Ministers. We have a well-educated population. We have a good global location. That is not something that the Executive have effected but a fact of life, I suppose. We have improving skills and improving R&D. We have a growing FDI attraction. Indeed, as Mr Flanagan talked about, we have an international reputation in certain sectors. I agree, but we have to accept that, at the same time, there are structural weaknesses in our economy that we are trying to iron out and deal with. By that, I mean the highest level of economic inactivity and under-representation in higher value-added sectors in our economy, such as finance and business services, and a low level of exports.

It will be a long road for us to travel to transform our economy. We have made huge progress in the past number of years. We should welcome that. We should all appreciate the efforts that have been put in by Ministers in this place and, indeed, our captains of industry, who have made that happen. It is absolutely the case that it is we in Stormont — politicians who are locally elected, representing local people — who are best placed to take our economy further down that long road of transformation. What I will say to Members opposite — I hope that they appreciate the spirit in which all these comments have been made — is that we have to do it step by step. We have to make sure and steady progress down that road rather than try to fast-track to the end, only to find ourselves very quickly back at the start.

Photo of Máirtín Ó Muilleoir Máirtín Ó Muilleoir Sinn Féin

I thank the Minister for giving way. I thought that he was starting to lose a bit of pace there anyway.

I have two points to make on trying to find some common ground. First, the Minister will accept that we need more transparency. We talk about trust and transparency from the Treasury. I take it that he accepts that we would like more transparency in Treasury figures. I had a little debate with it recently when trying to get an exact figure for VAT.

The second point is that we can have the fiscal levers and then decide when to use them. In fact, that is exactly what we will be doing with corporation tax. A week does not go by in the Chamber without someone's voice being raised in support of the tourism industry. We know that it is suffering under a 20% VAT rate and is asking for some flexibility. That surely is an area in which, if we had the fiscal lever, we could decide whether to pull the metaphorical trigger.

Do you think that we need more transparency? Having the fiscal levers and using them are two different things, but surely we need to have the choice.

Photo of Simon Hamilton Simon Hamilton DUP

I am not batting for the Treasury, but, on the point about information and transparency, particularly around tax take, I do not think that it was designed to produce regional figures. I think that the Treasury is grappling with the impact of devolution as well and, indeed, the demands in English regions for more transparency around these things. It is now starting to produce better estimates of tax take across the regions. We are using that work to inform our work. As it develops better transparency, we will all be the beneficiaries.

I do not think that the Member was in earlier for Question Time, when Mr Hilditch asked me about the VAT rate for the hospitality sector. A great campaign has been led by organisations such as Pubs of Ulster and other groups from the Northern Ireland hospitality industry that is now starting to spread across the UK. They took that campaign to Westminster as recently as last week. I wrote to David Gauke, who is the Financial Secretary to the Treasury, at the start of the month asking him again to look at the issue. There is one more Budget left before the election, and it is an opportunity to do something on it. It would not be specifically for Northern Ireland but would have to be for the whole UK. In writing to Mr Gauke, I cited the very good evidence from the Irish experience. Since 2001, 30,000 jobs have been created in the tourism sector, and it has produced a net benefit to the Irish Exchequer of €165 million. That is good, solid evidence and is why Michael Noonan was then able to stand up and say, "I am keeping this cut in place indefinitely". That evidence almost makes the case for us in Northern Ireland. Even though you cannot have a differential rate within a member state, because we have the land border — it is the same issue with corporation tax — I think that there is a compelling case for Treasury Ministers to look at it. That evidence from the South shows that it is not simply a cut and that they will lose revenue but that they can make some money back through increased PAYE and National Insurance contributions.

I will turn to Mr Ó Muilleoir's comments. He prefaced them by saying that he wanted to be helpful, and I think that he was. He made comments around the investment fund and the social innovation fund. At Question Time today, I pointed out, in response to questions from Ms Sugden and Mr Humphrey, that I see the potential to expand the number of investors who are putting money into the investment fund. The £40 million that we allocated in the draft Budget can almost be seen as seed capital. That is our initial contribution, and I want that initial contribution to grow to at least £100 million. We hope and expect to draw in another £1 billion from the European Investment Bank, and the feasibility study that is being carried out on our behalf by Deloitte and working with the EIB will draw out the sectors that that may be invested in. I do not see that as the end: £1 billion is impressive enough from a standing start, but it is not the end as far as I am concerned. We will absolutely work with EIB on an ongoing basis to, if possible, draw in more funds from it, but I see the potential of other international investors who we have started conversations with already. I do not want to disclose who they are for obvious reasons, but there has been an initial positive response from those organisations and institutions that would operate in that sort of space. I intend to have officials take that further forward and will personally intervene as and when required to try to make that happen. We should not be satisfied with a £1 billion fund; we should be looking to grow that to £2 billion, £3 billion and beyond. The impact that that will have on infrastructure in Northern Ireland will clearly be immeasurably better the bigger the scheme is.

There will be a consultation on the development of the social innovation fund. That will launch very soon. It will use the dormant accounts money initially and will be focused on loans rather than grants so that the £5 million that is there does not disappear very quickly, as would be the case with grants, but is there, gets paid back and is there for others to benefit from in the future. Those others will be social enterprises, charities, community organisations and faith-based organisations. It also has the potential to draw in additional investment. The Member has, in correspondence to me and in the Chamber today, drawn my attention to examples from other jurisdictions, and I am happy to follow those up with him and, indeed, with the organisations concerned.

Jo-Anne Dobson talked about the in-year financial difficulties. I give Mrs Dobson credit for being one of the only Members who stuck to talking about the Bill. She spoke more about in-year financial issues as opposed to next year's issues and was almost a lone voice in that regard. She rightly started off by placing blame for the in-year financial difficulties where it should lie; namely, that we had to find £87 million in year to pay penalties because of our failure to move forward on welfare reform. Whilst we are grateful that there has been a resolution on welfare reform, we should not forget that it has come at the cost of £100 million being lost to date to the Executive in their ability to invest in essential public services and to help many people who are on welfare.

She is wrong, though, in saying that many of the problems in-year were the result, not of welfare reform, but of other pressures that the Executive should have known about.

Two point three percent of the 4·4% in-year reduction was a result of the need to find money for welfare reform penalties. The decisions that the Executive had taken, and for which finances had to be found, included the historical institutional abuse inquiry and local government reform. I am sure that she did not intend to say, although it sounded like it, that the UUP opposed funding for those things. I know that they did not want to fund the social investment fund a couple of weeks ago, and I hope that they are not now saying the same of the historical institutional abuse inquiry and, indeed, local government reform.

She asked why there were so many fluctuations in-year and whether there had been so many redistributions and reduced requirements in any other year. Mr Girvan made the point during the debate. One of the principal reasons for such large changes to the Budget in-year was the failure to move forward with the A5, the Minister responsible for that being, of course, her party colleague, Danny Kennedy.

She raised several issues to do with health, including the pressures on health, which are well recognised. She did not recognise the fact that £500 million of efficiencies had been delivered since DUP Ministers took control of the Department of Health or, indeed, that there has been a £200 million plus allocation to the Department of Health in next year's Budget, which reflects that 46% of our expenditure goes on health.

I now turn to comments made by Anna Lo. Ms Lo made a very good case for investment in the environment in Northern Ireland. I have been encouraging privately, and I encourage her to take up with environmental NGOs the need to alter slightly the way in which they present their debate. It is an argument that is relevant to Mr McCrea's point about culture, arts and leisure. If the Executive's number one priority is, as it has been for nearly 10 years, to grow the economy, virtually all expenditure, particularly in those areas that see themselves as a bit Cinderella-like, needs to be argued for first and foremost through an economic prism. That does not mean that there is no merit in protecting the environment or in having a good arts community and cultural infrastructure.

In an environment where we have less money, the argument that will find more favour, and therefore perhaps more pounds, is the one that identifies the contribution to the economy through investment in environment or in culture. Mr Bradley on the SDLP Benches raised the issue of heritage-led development, something that I have backed in previous Budgets and am backing again in next year's. One of the reasons for my taking a personal interest in that area is the work of the Northern Ireland Environment Agency (NIEA) to present the argument for investment in heritage-led development from the perspective of the benefit to the economy and the jobs that it creates. Therefore I say to Anna Lo: yes, there is merit in arguing for what the Department of the Environment does to protect the environment, but there is also a need to make the argument about what investing in the environment means for our economy.

Ms Lo highlighted the concerns of the voluntary and NGO sectors in environment about Budget cuts. I say to the Minister of the Environment what I would say to any Minister: the voluntary, community or third sector should not be seen as an easy target for cuts in difficult financial times. There are some Departments and some Ministers who think that the third sector is an easy target. They think that they can go after them, because, "I do not have to worry about them. I am not responsible to them. They do not work for me. They are not in my Department, so they are an easy target for cuts." That should not be the way, particularly when those organisations are often delivering services in a much more efficient and effective way than central Government could do.

Trevor Clarke raised concerns about the management of the DRD budget, which concerns I share. It is regrettable that that Department is heading for an unacceptable overspend in this financial year, because the Minister failed to plan properly for the Port of Belfast receipt not being obtained. He failed to plan for that, and spending on the basis of having money that you do not have is not the way to manage your budget, particularly in difficult financial circumstances. I share Mr Clarke's concern and that of his Committee about the poor estimating of the cost of the Coleraine to Londonderry line upgrade.

Mr Flanagan raised the usual issues that he does around investment, or the lack of it as he sees it, in Fermanagh. I note that today, the MP for Fermanagh and South Tyrone issued a statement calling for more investment in the constituency. It is interesting that, in making that call, never once has the MP for Fermanagh and South Tyrone asked me or the economy Minister for a meeting to look at investment, or the lack of it as she would see it, in that area. Such negativity from Sinn Féin on this issue does not make the job of the economy Minister in attracting investment from anywhere any easier.

Mr Allister made the point that the values and ethos of a Government can be revealed by its Budget. He asked what the Executive value and could not find what they value through this Budget. This Budget is based on many values and principles, including support for key public services. That is reflected in an allocation of an additional £204 million to the Health Department, and which reflects the value that we place on the health service, which the Member voted against. It also includes a £60 million boost, over and above the draft Budget allocation, for the Department of Education, which has been topped up by the Minister of Education with a further reallocation from within his budget of around £17 million or £18 million, so that £80 million is going into the schools budget. That reflects the value that this Executive place on education and on schools, a value not reflected by Mr Allister's vote against the Budget.

This is a Budget that seeks to underpin economic growth. There is a 10% increase for the DETI budget to ensure its continued impressive record in attracting investment into Northern Ireland and in creating jobs in Northern Ireland. That is a value that this Budget underpins, a value, again, not reflected by Mr Allister in his vote against this Budget. It is a Budget that also underpins economic development and growth by boosting the expenditure in the Department for Employment and Learning from its draft Budget allocation by £35 million, an allocation that Mr Allister voted against.

I do not need to ask too much about what Mr Allister's values are. His value, of course, and his sole stated purpose, is to see an end to this place. He wants to see a return to direct rule. That is the value and the ethos that he has.

Photo of Simon Hamilton Simon Hamilton DUP

No, I will not give way.

[Interruption.]

It is absolutely true. The Member wants a return to direct rule. That is the outworkings of the policy he has —

Photo of Jim Allister Jim Allister Traditional Unionist Voice

I want durable, workable devolution, not this farce.

Photo of George Robinson George Robinson DUP

He wants to take part in it.

Photo of Simon Hamilton Simon Hamilton DUP

Absolutely, Mr Robinson. He loves being here. He absolutely loves it here. He wants to see a return to direct rule. That is the outworkings of the policy that he would have us pursue. He wants to see an end to devolution and an end to Stormont.

[Interruption.]

I would be the first to accept and agree that this system of government is far from perfect, but it is a hell of a lot better than the system of government —

Photo of Roy Beggs Roy Beggs UUP

Order. All remarks should be made through the Chair and Members should avoid making remarks from a sedentary position.

Photo of Simon Hamilton Simon Hamilton DUP

The system of government that we have, imperfect as it is, is far, far better than a return to direct rule and an end to devolution, which the Member advocates. In terms of helping vulnerable people in Northern Ireland, we would have full-blown, unadulterated welfare reform if we returned to direct rule. On 27 January in this House, after railing against the package of reforms and the package of measures to mitigate welfare reform today in the Chamber, Mr Allister said:

"I think there were sensible reforms to be made about the bedroom tax ... that had to be ameliorated". — [Official Report, Vol 101, No 4, p64, col 2.]

However, in wanting and seeking a return to direct rule and an end to devolution, we would not have a package of measures to ameliorate the bedroom tax or any other part of welfare reform. The Member sits and shakes his head but that is the truth. If there was a Conservative —

[Interruption.]

Mr Allister, there is nothing to explain when your position is wanting to see the collapse of this place and the inevitable return to direct rule, which you once described as a return to Dublin rule.

Photo of Simon Hamilton Simon Hamilton DUP

A return to Dublin rule is what the Member is advocating as the natural outworking of the policy that he is pursuing.

You would have the Conservative Party with the Liberal Democrats in power implementing —

Photo of Roy Beggs Roy Beggs UUP

Could all remarks go through the Chair, please?

Photo of Simon Hamilton Simon Hamilton DUP

— welfare reform without any changes, without an end to the bedroom tax that Mr Allister said in the Chamber almost three weeks ago:

"I think there were sensible reforms to be made about the bedroom tax etc that had to be ameliorated". [Official Report, Vol 101, No4, p64, col 2].

There would have been no amelioration of the bedroom tax had it not been for devolution and the existence of this place, so what are the Member's values and ethos when he wants to see a return to direct rule?

He rails against borrowing, and he has been told in this place before about the borrowing powers that we have, how they are the envy of other Administrations and how other Administrations and devolved regions of the United Kingdom want the borrowing powers and flexibilities that we have secured. It begs the question about Mr Allister's values when he would not have borrowed in difficult times to invest in infrastructure projects, the new roads, hospitals and schools that, otherwise, we could not have afforded.

It says something about Mr Allister's values and ethos that he would not have borrowed to rescue the members of the Presbyterian Mutual Society (PMS). Borrowing is how the rescue package for the PMS was funded, so it says a lot about the Member's values and ethos when he rails against borrowing, why we should not be borrowing and why we should not have borrowed, when he would not have invested in much-needed infrastructure projects or in any PMS rescue package.

It says a lot about the Member's values and ethos when he wants a return to direct rule and talks about the economy and trying to help out the little guy, when he would see, as a result of a return to direct rule, hugely increased household taxes, an almost immediate introduction of water charges — £500 bills landing on the doormats of everybody in Northern Ireland courtesy of Mr Allister — increased rates bills —

Photo of Jim Allister Jim Allister Traditional Unionist Voice

It is all about losing the limo. It is all about losing the limo.

Photo of Roy Beggs Roy Beggs UUP

Order, order.

Photo of Simon Hamilton Simon Hamilton DUP

— and an end to concessionary fares. Any of us involved in the talks before Christmas know fine well that the Government in Westminster would love to get their hands on the things that we are doing in having no water charges, the lowest household taxes in the whole of the UK and the concessionary fares scheme. They would want to bring to an end industrial de-rating, which has kept £300 million in the pockets of local businesses. There is also the small business rate relief scheme that is helping local businesses to the tune of £20 million per year. Those would all go if there was a return to direct rule.

In questioning the values and ethos of this Budget and this Administration, Mr Allister revealed more about his values and ethos. Not once in his diatribe did he offer a single positive alternative to this Budget — not once. That is Mr Allister all over: no positive alternative offered.

Mr Danny Kinahan congratulated — he was here briefly —

Photo of Jim Allister Jim Allister Traditional Unionist Voice

You did not tell us about how you treated the lady —

Photo of Roy Beggs Roy Beggs UUP

Order. The Minister has indicated that he is not giving way.

Photo of Simon Hamilton Simon Hamilton DUP

Mr Danny Kinahan congratulated the education sector for securing a boost to the education budget. However, on a tweet that he put out on 19 January, he said:

"Excellent, £63million more to Education..UUP and schools' pressures worked".

At least he had the courtesy and good grace to acknowledge the pressure applied by the schools sector to the Minister and myself. You can certainly congratulate them for the lobbying that they did. One organisation that you cannot congratulate for the £63 million increase to the education budget is the Ulster Unionist Party, which voted against the £63 million allocation to education in the Budget.

Mr Basil McCrea started by saying, and I am paraphrasing, that he had been at livelier wakes. I think that was the import of what he said.

He talked about the DCAL budget, and I touched on some of these points already. Nelson McCausland also raised issues and concerns about that in his capacity as Committee Chair. It is not my job to do the Minister of Culture, Arts and Leisure's job, as attractive as that might be to all of us at times. She has to prioritise her budget as allocated to her. She has to balance competing priorities between libraries, museums, sport and the arts. That is very difficult to do on a budget that was already very small and that has been reduced by 8·2%. The cut that the Department is facing is lower than that that was initially applied to it, because we as an Executive accepted that making a 15% reduction to that budget would have proportionately decimated it more than others.

The Member said it was only £10 million, which is a lot of money, and to say "only £10 million" is perhaps accurate enough in the context of our overall Budget. Someone might say something like, "It is only £10 million. Can you not just give it to us?" The question to the Member, as it would be to anybody who says that, is this: where are you going to find that £10 million? That is the problem —

Photo of Simon Hamilton Simon Hamilton DUP

Let me just finish.

That is the problem that I and anybody who might occupy my chair has. Looking at the Northern Ireland Budget at a global level, we find that we have to balance competing priorities, just as Ministers in their Departments have to balance competing priorities.

Photo of Basil McCrea Basil McCrea NI21

I thank the Minister for giving way. I accept his point. I understand that it is £10 million here and £10 million there and that we have to find cuts. All I felt that it was appropriate to do was to argue that, when you realise the draconian impact of this, you find that maybe these arguments have not been made elsewhere, so somebody should do it. I apologise if I have come forward with details. I understand that the Minister cannot be on top of every single line of the Budget, and I have taken on board what he said about perhaps needing to reframe the arguments in the context of the Executive's economic priorities, with the result that there might be a different way to go forward. Nevertheless, I still think that it is appropriate for me to stand up and say, "These are the impacts of this Budget. Do we really want to do this?"

Photo of Simon Hamilton Simon Hamilton DUP

I am not saying that the Member should not have brought forward the long list of concerns. I have no reason to question the validity of the issues that the Department is putting forward. I am not saying this about the DCAL budget, but as we have seen in some Departments, between draft and final Budgets and even since then, to try to win an argument with the Executive or elsewhere, some Ministers will put out scare stories on what is almost the worst possible position.

It is only £10 million in a Budget of £12 billion, but it is still difficult to find. It also has to be justified. That is the point that I was trying to make. Finding £10 million would offer outright protection in cash terms to the Department of Culture, Arts and Leisure for next year. However, finding more money for protection in cash terms is an argument that the Education Minister, who still faces a cut, could make, as could the Justice Minister, who still has to deal with pressures and, indeed, a reduction. The Environment Minister, the Minister for Employment and Learning or whoever it might be could also make that argument. So that is where there needs to be a justification and a better argument. I am sure that the Minister is grateful that the Member is rounding in behind her and trying to help her, but it is an argument that is more for her to make than anybody else. It is certainly her job to do that.

Joe Byrne was our penultimate Member to speak, and he raised his concerns about the voluntary exit scheme. He called finding 20,000 fewer posts across the public sector a "tall order". Again, this is where I get confused, although some might say that I am easily confused. The SDLP agreed that figure. On 19 December, the SDLP agreed a position, which is now being referred to as the Stormont Castle agreement. The position was agreed amongst ourselves that our target would be a reduction of 20,000 in the public sector's headcount. It was a position that was taken to the Secretary of State, who then took it to the Prime Minister and sold it to him. It helped to inform their response to our overall call for a financial package.

Photo of Joe Byrne Joe Byrne Social Democratic and Labour Party

I appreciate the Minister giving way. Does he accept, however, that there has to be a calibrated and managed approach to make sure that we do not end up with a net deficit of 20,000 jobs? As we reduce the public sector, we have to create jobs in the private sector. An economic development plan is crucial to making that happen.

Photo of Simon Hamilton Simon Hamilton DUP

I have made the point that there is an economic plan in place. That is the economic strategy that the Executive, including his party colleague, the Minister of the Environment, agreed. In fact, it was probably the previous Environment Minister, who is sitting behind the Member, who agreed that economic strategy when it went through the Executive. That is in place. The devolution of corporation tax will obviously add to and enhance that.

The Member is right to raise issues and concerns that I have also expressed. There will be an effect on our economy of having 20,000 fewer people in the public sector. If he is trying to raise concerns on the basis that the SDLP was almost opposed to that, which is what I felt that he was doing, I remind him that, as with welfare reform, his party signed up to a package of reforms, to an agreed position on objectives and to reducing the size of the public sector.

I think that I have dealt with several of Mr McCallister's points. He raised the Port of Belfast issue, which I addressed. He also raised the cost of corporation tax, and I talked about the stepping and staging of costs and the potential savings from the voluntary exit scheme. We may be able to deal with what the comprehensive spending round meant for the protection of health and education in the Northern Ireland Budget. That may not be done easily, but we may have more room to do that.

I was not entirely sure whether Mr McCallister was for or against the package of welfare reform measures. There were so many votes last week that I cannot remember how he voted. There is a cost, and he asked where the money would come from. The Executive, in my view rightly, agreed a package of measures, and that comes with a cost. The Budget Bill gives effect to the Vote on Account for next year. In the first year, which is next year, the cost will be only — only, I say — £25 million. That is significantly less than the estimate of £70 million that we set aside a package for in the draft Budget, so we have saved money. There is some room in the future cost estimates. They have been quite liberal in their estimation, and I do not think that it will cost anywhere near as much as was estimated. He was right to point out that that is money that will come from somewhere else, but I think that, on balance, faced with having welfare reform without any changes or welfare reform with the changes that we were able to afford and deliver, we were right to go for the latter. That will come with a cost, but it is a cost and a price worth paying.

The Budget Bill brings to a close the 2014-15 financial year and makes provision for the early months of 2015-16. It also provides for expenditure on the new judiciary pension scheme. The Assembly has played a vital role in the formation of the Bill. It is a result of the Executive and the Assembly’s agreement to Budget 2011-15, the associated Main Estimates voted for in June 2014 and the changes agreed by the Executive during the June, October and January monitoring rounds for 2014-15.

As decision makers, we have spent much time debating, agreeing and revising the Budget plans. The process started back in 2010 — at times, it feels like the debate started back in 2010 — with debates on the 2011-15 Budget and concluded only last month with the Executive’s agreement of the January monitoring round. I commend the Assembly for the role that it has played in that process and I ask it to support the Bill.

Photo of Roy Beggs Roy Beggs UUP

Before we proceed to the Question, I remind Members that the motion, as it is on the Budget Bill, requires cross-community support.

Question put. The Assembly divided:

<SPAN STYLE="font-style:italic;"> Ayes 67; Noes 19

AYES

NATIONALIST:

Mr Boylan, Ms Boyle, Mr Brady, Ms Fearon, Mr Flanagan, Mr Hazzard, Mr G Kelly, Mr Lynch, Mr F McCann, Ms J McCann, Mr McCartney, Ms McCorley, Mr McElduff, Ms McGahan, Mr M McGuinness, Mr McKay, Ms Maeve McLaughlin, Mr McMullan, Mr Maskey, Mr Milne, Ms Ní Chuilín, Mr Ó hOisín, Mr Ó Muilleoir, Mr O'Dowd, Mrs O'Neill, Ms Ruane, Mr Sheehan

UNIONIST:

Mr Anderson, Mr Bell, Ms P Bradley, Mr Buchanan, Mrs Cameron, Mr Campbell, Mr Clarke, Mr Craig, Mr Devenney, Mr Douglas, Mr Dunne, Mr Easton, Mrs Foster, Mr Frew, Mr Girvan, Mr Givan, Mrs Hale, Mr Hamilton, Mr Hilditch, Mr Humphrey, Mr Irwin, Mr McCausland, Mr I McCrea, Mr D McIlveen, Miss M McIlveen, Mr McQuillan, Lord Morrow, Mr Moutray, Mr Poots, Mr G Robinson, Mr P Robinson, Mr Ross, Mr Spratt, Mr Weir

OTHER:

Mrs Cochrane, Mr Dickson, Dr Farry, Mr Ford, Ms Lo, Mr Lyttle

Tellers for the Ayes: Mr McQuillan, Mr G Robinson

NOES

NATIONALIST:

Mr Attwood, Mr Byrne, Dr McDonnell, Mr McGlone, Mr McKinney, Mr A Maginness, Mr Rogers

UNIONIST:

Mr Allister, Mr Cree, Mrs Dobson, Mr Elliott, Mr Kinahan, Mr McCallister, Mr B McCrea, Mr McGimpsey, Mr Nesbitt, Mrs Overend, Mr Swann

OTHER:

Mr Agnew

Tellers for the Noes: Mr McKinney, Mr Rogers

<TR><TD>Total Votes
86Total Ayes67[77.9%]
Nationalist Votes34Nationalist Ayes27[79.4%]
Unionist Votes45Unionist Ayes34[75.6%]
Other Votes7Other Ayes6[85.7%]
<BR/>

Resolved (with cross-community support):

That the Second Stage of the Budget Bill [NIA Bill 45/11-16] be agreed.

Adjourned at 7.07 pm.