Brexit: At-risk Projects

Oral Answers to Questions — Finance – in the Northern Ireland Assembly at 2:15 pm on 8th November 2016.

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Photo of Philip Smith Philip Smith UUP 2:15 pm, 8th November 2016

4. Mr Smith asked the Minister of Finance, other than the York Street interchange, what Executive projects are at risk following the decision of the United Kingdom to leave the European Union. (AQO 599/16-21)

Photo of Máirtín Ó Muilleoir Máirtín Ó Muilleoir Sinn Féin

Thank you, Mr Smith. As you are aware, I met David Gauke, the Chief Secretary to the Treasury, on 24 October. The British Treasury continues to refuse to guarantee that it will replace EU funds that are lost after the exit from the EU — if it happens. The British Government need to underwrite not only funds up to the point of leaving the EU but income streams that would have been available to us afterwards. There remains considerable uncertainty for projects without that guarantee of continued funding and without confirmation of the date of leaving the EU — if that happens. "Considerable uncertainty" is diplomatic language; I was away for a short period, and I see that things have become even more confused in my absence.

The York Street interchange project remains a priority for the Executive and for me, and the Member will have heard me say that publicly. In view of that, a joint working group involving my Department, the Strategic Investment Board and the Department for Infrastructure has been established to look at that project.

Photo of Philip Smith Philip Smith UUP

I thank the Minister for his answer. As recently as 25 October, James Brokenshire said that the Treasury will:

"guarantee funding for structural and investment fund projects signed before the UK leaves the EU, even where projects continue after we leave."

I am holding a copy of a press release dated 15 March 2016 from the then Minister for Regional Development, Michelle McIlveen, in which she explicitly states that construction will commence in 2017. Will the Minister tell me whom I should believe — the Treasury or the Executive — as both cannot be right on the funding of the York Street interchange scheme?

Photo of Máirtín Ó Muilleoir Máirtín Ó Muilleoir Sinn Féin

In all cases where there is a difference of opinion, Philip, do not believe the NIO or the Treasury. When David Gauke had that meeting, he had the Secretaries of State for the devolved regions in there as well, who were reasonably mute during the meeting. The situation is summed up by the following analogy: if I wanted to build a house and had the money to build 60% of it, that would great, but would I really do it if I did not have a guarantee on the other 40%? Some of our transport projects in particular, which date out a while, would perhaps not even go out to tender, and Europe would not request bids for them, until 2018. There is no certainty on that 40% so that you can build 100% of your home. There is no certainty that that money would be delivered and that letters of offer would be signed off before there is an exit — if there is an exit — by the British from the EU.

I have enormous sympathy with you being caught between the NIO and the Executive or me, but I assure you that you will always find a safe berth here. You should place your trust in the Finance Minister at all times.

Photo of Gerry Kelly Gerry Kelly Sinn Féin

Gabhaim buíochas leis an Aire as a freagraí go dtí seo. I thank the Minister for his answers up to now. Will he give an update on Peace and INTERREG funding?

Photo of Máirtín Ó Muilleoir Máirtín Ó Muilleoir Sinn Féin

I thank the Member for his question. Two Fridays ago, we met at Greenmount campus in County Antrim to discuss EU funding. Representatives attended from across the North and further afield. They are worried not only about EU funding but about government investment plans. I said then — I will say it again — that this Executive is 100% committed to the flagship projects. That includes the A5, the A6, the Belfast transport hub, the mother and children's hospital, the college at Desertcreat and the regional and subregional stadia.

The groups that gathered want that reassurance because they understand that it is not about EU funding only; we need a joined-up approach to growing the economy. After that meeting, we guaranteed that letters of offer would go out for the moneys that I have direct responsibility for: INTERREG and Peace funding. You will be pleased to know that government does not stop just because I am out of the country, and letters of offer issued last week to INTERREG and Peace projects.

Ten INTERREG letters of offer will issue in the week beginning 7 November, which is this week. I believe that they are now in the post or have gone out. They include the Swell project, which comes under the environment theme; the Co-Innovate/InterTradeIreland SME project; five health projects; and three greenway projects. On 2 November, the first Peace II steering committee committed to £13·4 million for the Victims and Survivors Service. I apologise for that long answer.

Photo of Emma Little Pengelly Emma Little Pengelly DUP

I am sure that the Minister will accept that EU funding guarantees are an issue not just here but across the United Kingdom when it comes to protecting infrastructure projects and ensuring that that pipeline continues. I am concerned by what the Minister said about that —

Photo of Caitriona Ruane Caitriona Ruane Deputy Speaker

Has the Member a question?

Photo of Emma Little Pengelly Emma Little Pengelly DUP

There have been attempts by Treasury to clarify and guarantee. What further actions are you taking to satisfy the Department and the Executive that the guarantees are there to ensure that those projects can go ahead?

Photo of Máirtín Ó Muilleoir Máirtín Ó Muilleoir Sinn Féin

I accept their guarantees, despite my earlier comments to Philip. When the British Government say that they will guarantee the moneys until an exit, if it happens, I accept that. However, there are two areas that we disagree on.

The first relates particularly to large infrastructure projects. If the letters of offer are not issued by the time of an exit, which could be March 2019 for our friends in England and Wales, the Government will not guarantee funding. That is a gap, and they need to fill it. As well as that, they need to give us a guarantee now that, when the CAP money disappears, they will replace it. That is essential because 10% of the payments for agriculture from the EU that go towards what you call the UK end up here. A Barnett consequential would mean that only 3% ended up here. We need the British Government to close that gap as well. They need to guarantee that all the funding we receive at the moment under EU programmes will continue to flow here. I say that particularly in relation to many of the groups that I met — whether they were from the Bogside, Tiger's Bay or south Armagh — at Greenmount College. They are already looking ahead — some to Peace and INTERREG, some to other funds — and asking, "What happens if we are pushed out of Europe? Who will guarantee the funding to the Cedar Foundation, the WAVE Trauma Centre or Relatives for Justice?". The answer is that the British are refusing to guarantee that.

I accept it when Chancellor Hammond says that, until exit, he will stand over signed letters of offer. However, he needs to go further and say that he will stand over letters of offer, particularly for large infrastructure projects, signed after that. Then, he needs to tell us how he will fill the gap in the time ahead.

Photo of Jim Allister Jim Allister Traditional Unionist Voice

Clearly, it is not, but should it not be beneath the Minister to scaremonger on this issue? The Chancellor's commitment is very clear —

Photo of Caitriona Ruane Caitriona Ruane Deputy Speaker

Has the Member a question?

Photo of Jim Allister Jim Allister Traditional Unionist Voice

He will underwrite projects signed until the date —

Photo of Caitriona Ruane Caitriona Ruane Deputy Speaker

Has the Member a question?

Photo of Jim Allister Jim Allister Traditional Unionist Voice

I am seeking to ask a question, if I might be permitted. He will underwrite projects signed to the point when the UK leaves — and we will leave.

Photo of Caitriona Ruane Caitriona Ruane Deputy Speaker

Will the Member come to his question, please?

Photo of Jim Allister Jim Allister Traditional Unionist Voice

It is not to the point of letters of offer; it is to the point of projects signed —

Photo of Jim Allister Jim Allister Traditional Unionist Voice

— and that clearly extends to the interchange at York Street as much as to anything else.

Photo of Caitriona Ruane Caitriona Ruane Deputy Speaker

Will the Member come to his question, please?

Photo of Jim Allister Jim Allister Traditional Unionist Voice

Are the Minister and his colleague in the Department for Infrastructure simply trying to drag their feet to make a case against Brexit?

Photo of Caitriona Ruane Caitriona Ruane Deputy Speaker

Will the Member come to his question rather than making long statements?

Photo of Jim Allister Jim Allister Traditional Unionist Voice

If you had listened, you would know that I have asked it.

Photo of Caitriona Ruane Caitriona Ruane Deputy Speaker

Minister, if there is a question there, you might wish to answer it.

Photo of Máirtín Ó Muilleoir Máirtín Ó Muilleoir Sinn Féin

There is a great saying in Irish, aithníonn ciaróg ciaróg eile, which means that one beetle recognises another. However, I certainly do not recognise myself as a scaremonger, but I know one person in the House who has a good reputation in that regard.

The issue remains, Mr Allister, although it is great that you have the certainty that no one in London can give us. Brexit means Brexit, but it is an omnishambles that has got more confusing in the last seven days. Regardless of what you wish to happen, I am interested not in scaremongering but in getting the facts and getting a guarantee. As I said to Mr Smith and others, I am happy with the guarantee over Peace and INTERREG money until the date of an exit. However, I am not happy that the British will not guarantee letters of offer and contracts that are signed off after a departure. They need to guarantee them so that we can plan to build, as I said, 100% of the house, not 60% of it. That might work where you are from, but, where I am from, we build the roof as well.

Photo of Caitriona Ruane Caitriona Ruane Deputy Speaker 2:30 pm, 8th November 2016

That ends the period for listed questions. We will now move on to topical questions.