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5 June 2015

Why an argument over welfare reform could have big consequences for Northern Ireland

Welfare reform could have momentous consequences for Northern Ireland and the future of the Stormont parliament.

By Ciara Dunne

The failure of the welfare bill in Stormont has thrown the Executive and Northern Irish politics into chaos and uncertainty. The welfare reform bill would have brought a number of reforms into action in Northern Ireland, including introducing the bedroom tax for those under 61. It has proved extremely contentious and the main parties had been locked in negotiations over the bill for months which culminated in last week’s vote. Despite a majority of MLAs voting for the bill, there is a mechanism, a petition of concern, which can be used to veto a bill when support doesn’t come from both communities. This was activated when Sinn Fein, the SDLP and the Green Party signed a petition of concern. This was a major incident in a prolonged impasse. The bill initially had the support of Sinn Féin and the SDLP however they are now claiming they were misled. The DUP have countered by suggesting that Sinn Féin are indulging in fantasy politics rather than being realistic.

If the DUP and Sinn Féin can’t reach an agreement, and after months of negotiation already they haven’t, Westminster may have to step in. Theresa Villiers, the Secretary of State for Northern Ireland, has stated that although the preference is to avoid this, it is a distinct possibility. Westminster would then take control of implementing welfare reforms in Northern Ireland direct from London. It is particularly crucial to deal with the budgetary element quickly.

The Treasury is currently penalising Northern Ireland at a rate of around £10 million a month. Northern Ireland’s economic situation is perilously reliant on the public sector and public spending. Unemployment is currently at 6.2 per cent, higher than the UK average of 5.5 per cent.  Northern Ireland also has the highest proportion of public sector employment in the UK as well as higher than average rates of public spending per person. If they cannot manage the economy, then it could have severe implications for public spending. If the already high unemployment rises even further the Northern Ireland economy is likely to flounder. While Stormont has turned to third parties in the past to help with problems, this has always been related to problems involving the legacy of the Troubles rather than actual issues of governance such as the economy.

Westminster or civil servants taking control of the budget temporarily may provide enough space for negotiations but it is definitely a step backwards for the Belfast Agreement. The DUP has already called for Westminster to step into the breach. For them, while this is not ideal, Foster’s willingness to let Westminster take control, shows that it is unlikely they will pull out of government over this bill. Sinn Féin are also heavily invested in remaining in government and continuing to appear as if they are both anti-austerity but also a practical party of government. They’re facing elections in both Northern Ireland and Ireland in 2016. They are polling significant amounts of support in Ireland and are aiming to be in government in Ireland and Northern Ireland simultaneously in 2016, which is particularly symbolic as it’s the centenary of the Easter Rising. This could be endangered by them pulling out of the Executive, creating an image of unreliability. Particularly as economic credibility is one of the major question marks over Sinn Fein in Ireland. To pull out of the Executive now could have serious repercussion for Sinn Féin that will affect them both in and outside Northern Ireland. As such they are unlikely to want to risk that. It is also unlikely to save Northern Ireland from cuts as if the Executive falls, the reforms will most likely be implemented from London. If the Conservative government handles this well, they should be able to impose the cuts while maintaining the Stormont administration.

Another option is for Westminster to let a senior civil servant take over responsibility for welfare reform, which may be a somewhat more palatable option for the main parties in the short term, particularly if it was done from Belfast rather than London. This may be the best option for the Westminster government to take to protect the Executive. This would allow continued negotiations without Sinn Féin having to face the issue of Westminster taking control. With or without the Irish general election around the corner, they may feel that they have to pull out of the Executive if this were to occur. On the other hand, a senior civil servant in Belfast taking control may not be exactly what they want but it doesn’t have the same potent symbolic impact of Westminster going over the heads of the Stormont government. It may give Sinn Féin enough room to save face without pulling out of the Executive if they come under pressure in the way that Westminster taking power won’t.

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It is vital now for the continued health of the Belfast agreement for this issue to be resolved. The Belfast agreement must grow and evolve, the alternative is stagnation and failure. For Westminster to take back powers, particularly permanently, will infantilise the Stormont government and put an end to further reconciliation. For progress to be made, the British government must facilitate further negotiations and devise a framework that makes Sinn Féin and the DUP come to an agreement rather than turning to Westminster or Washington every time they disagree. That is not the way of a functioning government, particularly as this disagreement could have significant economic implications. The welfare reform bill has destabilised the Stormont administration, now there are two options left to it. Either it can come out stronger or it can allow the government to crumble. One way or another, the impact of the Welfare Reform bill vote has the potential to be momentous for Northern Irish politics.