Stormont on brink of collapse: Uncharted waters after welfare cuts bill is sunk

Petitions of concern cause debate to end in stalemate

By Noel McAdam

– 27 May 2015

The Assembly is today staring into an abyss after a crucial vote to implement welfare reforms failed.

With Stormont now teetering on the brink of collapse, the lack of progress on the legislation means Government departments will run out of money by the end of July.

As expected, the DUP bid to get Assembly approval for the package agreed at Stormont House in December failed.

Sinn Fein and the SDLP blocked the legislation underpinning the welfare reforms, insisting they would not abandon vulnerable groups – such as the long-term sick, disabled and larger families – to the Tory cuts agenda.

In the end, 59.79% of MLAs present supported the reforms. But the two nationalist parties lodged a petition of concern, a veto meaning the legislation could not pass without the support of a majority of both nationalists and unionists.

None of the 39 nationalists supported the Bill. The Bill was also opposed by sole Green Party MLA Steven Agnew, but supported by the Ulster Unionists, Alliance and TUV leader Jim Allister.

The DUP warned the last-ditch failure to move the Bill forward would mean Westminster taking back welfare powers and introducing harsher reforms already in force in Britain without the safeguards which had been negotiated for claimants here.

Pressure will now mount on Secretary of State Theresa Villiers to step in. But she has given no indication that London would be willing to take back responsibility for welfare without the consent of the Assembly. Nationalists would oppose such a move.

But the thwarting of the welfare vote means the budget under which Executive ministers and their departments operate will in all likelihood also collapse – and possibly take the Assembly down with it. The first option in such circumstances is for fresh Assembly elections, although the stalemate would still be there afterwards.

DUP Finance Minister Arlene Foster says she is legally bound to introduce the budget by Friday. But her party has already made clear it will not support it, because of the financial hole of up to £600 million at its centre as a result of the failure to go ahead with the welfare changes.

Both main parties are aware of the uncertainty now facing Stormont – but have still not been able to agree a way forward.

Sinn Fein’s Alex Maskey, chair of the committee that has scrutinised the Welfare Bill in detail, confessed: “The Bill will not pass today. We are then into territory unknown, and it is up to the parties to work out where we go.”

And former Finance Minister Sammy Wilson admitted: “We are moving into uncharted waters. We don’t know constitutionally where this could lead us. We don’t know politically where this could lead us.”

Ulster Unionist Roy Beggs warned the failure to enact the Bill could directly lead to thousands of redundancies in the public sector.

“There is no doubt that if the budget problem deepens even further if the Bill is not approved, there will be thousands of compulsory redundancies instead of voluntary redundancies across the public sector. How else do you balance the budget?” he asked.

Opening yesterday’s debate, Social Development Minister Mervyn Storey castigated Sinn Fein and the SDLP. He compared them to Pontius Pilate, washing their hands of the Stormont House Agreement (SHA) they reached in December.

But Deputy First Minister Martin McGuinness said the wider issue involved “eye-watering” cuts expected in Chancellor George Osborne’s new Budget on July 8, which formed no part of the SHA.

“Make no mistake about it, the biggest threat to our institutions remains the ongoing Tory agenda of cuts. This is a time when the Executive parties need to stand together,” he said.

But Alliance leader David Ford argued: “The reality is that if we do not agree this Bill, we have the prospect of full-blooded Tory cuts with no amelioration whatsoever.”

Former SDLP minister Alex Attwood said yesterday was an “artificial deadline” and there were 42 days left before Mr Osborne’s Budget. But he warned that if there was no agreement by August “when the bank account runs dry… we are in free fall.”

Quotes

Alex Attwood, SDLP: “We need to have a budget in place when the bank account runs dry – and the bank account runs dry in August. If you do not have a budget by then, we are in free fall.”

Sammy Wilson, DUP: “There are processes that have to be gone through and it is not practical to leave this until the end of July… this is not a contrived deadline – it is a genuine deadline.”

The options if Budget is not agreed

Both unionists and nationalists admit the Assembly is in uncharted waters — facing the prospect of collapse if Stormont parties have not agreed a Budget by July.

Here is one potential scenario:

• DUP Finance Minister Arlene Foster is due to bring forward a new Budget Bill by the end of this week. But because welfare reforms haven’t been passed, it will include an additional £600m of cuts — and her own party will not back this.
• A senior civil servant would then be forced to take control of the departmental purse strings — but with a smaller budget than last year.
• Westminster could take control of our welfare system — but Secretary of State Theresa Villiers has stated her reluctance to do so.
• If it did, such a drastic step could prompt Sinn Fein to withdraw from the Executive, triggering the collapse of the Assembly.
•  If Northern Ireland returned to Direct Rule, London could implement whatever welfare reforms it wanted.