Independent Fiscal Council for Northern Ireland

Oral Answers to Questions — Finance and Personnel – in the Northern Ireland Assembly at 2:45 pm on 7 December 2015.

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Photo of Michael McGimpsey Michael McGimpsey UUP 2:45, 7 December 2015

2. Mr McGimpsey asked the Minister of Finance and Personnel for her assessment of how the new Independent Fiscal Council for Northern Ireland will work with her Department. (AQO 9276/11-16)

Photo of Arlene Foster Arlene Foster DUP

The Stormont Agreement document set out the Executive’s plans to establish the Independent Fiscal Council for Northern Ireland. It is envisaged that the council will prepare annual assessments of the Executive’s revenue streams, spending proposals and the overall sustainability of the Executive’s public finances.

A growing number of fiscal councils are being established around the globe, particularly in the advent of the economic downturn. In seeking to determine the detailed terms of reference for the Independent Fiscal Council for Northern Ireland, I will draw on the national and international evidence of what works best to ensure that those lessons can be applied and that arrangements are put in place that suit Northern Ireland.

Photo of Michael McGimpsey Michael McGimpsey UUP

Will the Minister explain what lessons she believes can be learned from the operation of the Office for Budget Responsibility (OBR) at Westminster, particularly on managing the Budget and on dealing with so-called financial black holes and emergency borrowing from the Consolidated Fund?

Photo of Arlene Foster Arlene Foster DUP

We should look not just at the OBR but at other independent fiscal councils that have been set up recently: the Irish Republic has a fiscal council, Scotland has a fiscal council and we should look at all of those to decide what is most applicable to us here in Northern Ireland.

The fiscal council will add a degree of transparency and independence to our fiscal plans. It will not interfere in any way with what we do as an Executive to drive the economy forward. Indeed, it is up to us to set the Budget, but it will aid with the transparency of the Budget, so, in that way, it will be helpful.

Photo of Jim Allister Jim Allister Traditional Unionist Voice

I think I welcome the fiscal council, particularly if it is a brake on profligacy, fantasy Budgets and such matters. The fact that its membership and terms of reference have to be approved by the Treasury, presumably, is good. Can the Minister amplify a little by comparing and contrasting it with the Office for Budget Responsibility? Is it to be a devolved structure of that sort by another name, or is it to be something different?

Photo of Arlene Foster Arlene Foster DUP

First, I welcome the fact that Mr Allister has welcomed something in the House today.

Some Members:

Hear, hear.

Photo of Arlene Foster Arlene Foster DUP

It is a red-letter day for the Assembly.

It is not going to be akin to the Office for Budget Responsibility in a devolved mechanism; it is to be an independent fiscal council, set up with probably a small membership. I imagine that it will be made up of around three or four people with expertise in the area. As the Member rightly said, its terms of reference have to be agreed with Her Majesty's Treasury, but that will be done in conjunction with my Department. I think it will aid with transparency and will give the public more information about the Budget process. Just last week, I had a meeting with my ministerial advisory council, and we discussed how we could engage more with society and the public on budgetary matters so that they had a better understanding of what happens with public money and how it is spent. It will aid in all those ways and should be welcomed by the House.

Photo of Máirtín Ó Muilleoir Máirtín Ó Muilleoir Sinn Féin

Go raibh maith agat, a Cheann Comhairle. Gabhaim buíochas leis an Aire. Minister, I hope that it is a two-way street and that the Independent Fiscal Council will ask you for some advice as well and that, no doubt, you will give it. Can you confirm to me that, while it will advise, it will be you as Minister and the Executive who will take the decisions ultimately?

Photo of Arlene Foster Arlene Foster DUP

Absolutely. The fiscal council is there to advise, aid and, dare I say, shine a light on what happens here in Stormont. We will set the Budget and the trajectory. It can comment on and talk about the issues that we raise, but power will still very much rest with the Executive.

Photo of Mitchel McLaughlin Mitchel McLaughlin Speaker

Before we move on, I inform Members that questions 7 and 8 have been withdrawn.