Northern Ireland (Stormont Agreement and Implementation Plan) Bill — House of Commons, 2016-03-10
Topic: Macroeconomics
Robert Ben Lobban Wallace (Conservative, Centre-right): Clause 9 delivers the commitment, set out in the "Fresh Start" agreement, that the Government would legislate to promote increased transparency in the setting of Executive budgets. The clause amends section 64 of the Northern Ireland Act 1998. It requires the Northern Ireland Finance Minister to lay a statement in the Assembly specifying the amount of UK Government funding available for the financial year, as calculated by the Treasury and notified by the Secretary of State. The Finance Minister’s statement must be laid at least 14 days in advance of the introduction of a draft Executive budget Upon laying the draft budget, the clause also requires that the Finance Minister issues a further statement showing that the amount of Government funding required by the draft budget does not exceed that specified by the Secretary of State. The clause also makes provision for a similar process to be followed if there is any change in the level of Government funding provided to the Executive. If this occurs, the Secretary of State can notify the Finance Minister of the change in funding. Within four months, the Finance Minister must inform the Assembly of this notification and specify the revisions to expenditure proposals required as a result of the Secretary of State’s notification. In providing for greater transparency around Executive finances, this clause will encourage affordable and sustainable budgets going forward I do have some sympathy with the aim of amendment 18, which is to bring about further transparency in the budgetary process—that is what I think clause 9 already achieves. I understand there to be two main purposes behind the amendment to the provisions in the Bill which deal with the draft Budgets presented to the Northern Ireland Assembly To deal with subsections (a) and (b) in the amendment, the inner workings of the Barnett formula are sometimes unfairly characterised as opaque. In fact all of the information which underlies the calculations and therefore the calculation of the block grant is set out in the Treasury publication known as the "Statement of Funding Policy" As will once again be evident when the Chancellor presents his Budget next week, the Barnett consequentials for Northern Ireland relating to funding decisions taken by the Treasury will be communicated to the Northern Ireland Executive almost instantly upon the Chancellor taking his seat. It is the intention behind the provisions in this Bill to make it possible for Assembly Members—and parliamentarians in this House who take an interest— to more easily work out what is going on under the surface to deliver the Executive’s budgetary allocations from the Treasury. I want to reassure hon. Members that the Northern Ireland Office is working closely with the Treasury and the relevant Northern Ireland Departments to determine the format of the new statement that the Finance Minister will be obliged to lay in the Assembly. The statement will necessarily include information on the application of the Barnett formula and its outcomes We do not believe the provisions set out in paragraphs (a) and (b) of the amendment will achieve the aims intended, or that they are necessary. In fact, a statement which simply said that "the amount of UK funding included in this statement was calculated by the Treasury with reference to the statement of funding policy" would be technically compliant with the amendment. I do not believe that that is the intent. I ask hon. Members to take it that we will ensure that the statements, when made, are more informative on a voluntary basis than such legislation would compel them to be Paragraph (c) of the amendment is of a rather different character, and the Government cannot accept the logic behind it. Indeed, matters related to this subject were debated at some length when the House considered the proposals for English votes for English laws. It is not possible to calculate changes to the block grants on a Bill-by-Bill basis The block grant allocations to the Scottish Parliament, the Welsh Assembly and the Northern Ireland Assembly are calculated at spending reviews and adjusted following decisions taken at fiscal events such as Budgets or autumn statements on overall Whitehall departmental budgets. Approval from Parliament to pay funds into the respective devolved Consolidated Funds is granted through the Supply estimates process—itself not subject to EVEL Even when a Bill’s impact assessment identifies extra spending or savings, implicitly or explicitly through a money resolution, in many cases this decision may not impact on the size of the block grant at all. So the intent which I understand to be behind the amendment would have no practical effect. The relevant part of the Finance Minister’s statement would say, every time he or she made it, that no effects of the type specified in the legislation has been identified In relation to paragraph (d) of the amendment, there is no reason why the statement to be made by the Finance Minister should not clarify any elements of ring-fenced funding being made available to the Executive. However, given the reservations that I explained earlier about the need to prescribe every aspect in legislation, I ask again that hon. Members accept that we will work closely with the Finance Minister to ensure that sufficient detail is made available to permit proper scrutiny and understanding of the various funding sources available to the Executive On paragraphs (e) and (f) of the amendment, I am afraid that we are unclear precisely what is intended by the proposed provisions. The Executive’s block grant does not generally include non-devolved elements of funding, and the charter for budget responsibility sets out obligations for the UK Government, not for the Northern Ireland Executive. Finally, much of what is provided for in the final proposed subsection, which would require the Finance Minister to lay "further timely statements", is already achieved by the existing provisions. New subsection 64(1C) to (1E) will compel the Finance Minister to lay new statements to the Assembly under certain circumstances if notified of changes to the level of UK funding available. The new statements will not, however, be any more able to deal with the questions of changes provoked by legislative provision at Westminster than as explained previously in relation to English votes for English laws I urge hon. Members to withdraw their amendment I beg to move that clause 9 stand part of the Bill.