Debate contribution: Budget Bill: Second Stage

Debate contribution by Mr Eóin Tennyson on 19 February 2024.

MLA

Mr Eóin Tennyson

Party at the time

Alliance Party

Date

19 February 2024

Type

Debate contribution

Business

Executive Committee Business

Heading

Budget Bill: Second Stage

Assembly identifier

Official Report component 4223444

Read the official Assembly record

Text

I rise on behalf of the Alliance Party to support the Bill. At the outset, I welcome the Minister to her place and congratulate her on her new role. I very much look forward to working with her in my position as a member of the Finance Committee. As I indicated to the Committee earlier today, I am content that the Bill proceed by accelerated passage, recognising that, if it were not to receive Assembly approval and Royal Assent swiftly, Departments and other public bodies might have legislative difficulty in accessing cash not only in the closing weeks of this financial year but in the early months of 2024-25. We all recognise, however, that the position in which we currently find ourselves is entirely unsatisfactory. I am conscious that, in normal circumstances, the Minister and the Finance Committee would have been intricately involved in shaping and scrutinising this Budget from the outset, through the Main Estimates and monitoring rounds, right up to finalisation and, ultimately, this Budget Bill. Instead, in the absence of a functioning Assembly and Executive, and for the fifth time in the past seven years, the 2023-24 Budget was laid at Westminster by the Secretary of State, without the input of locally elected and accountable Ministers and in the absence of any meaningful scrutiny or debate in this place. That is not a position that any of us should be prepared to countenance or grow accustomed to. It is an appalling dereliction of duty, and it is simply not good enough. Those repeated cycles of political abeyance have not been cost neutral. Swingeing cuts have had a devastating impact on the people we all represent. Too often that burden falls on the most vulnerable in our community, from cuts to holiday hunger payments to the withdrawal of the Happy Healthy Minds counselling service and some of the worst hospital waiting lists anywhere in western Europe. The harm arising from decisions taken in an attempt to live within the Secretary of State's Budget will not be undone in the remaining six weeks of the financial year. Nonetheless, the additional funding that has been provided will offer much-needed relief to public services and to public-sector workers, who have been immensely patient in challenging circumstances. It is important, however, that we remind ourselves of the context in which the Bill is being introduced. Under the Conservative Government, following a decade of austerity and a botched Brexit, the UK's economic growth has stagnated, consumer prices have increased sharply and living standards have fallen, while the UK's tax burden is set to reach a post-war high. The Chancellor's autumn statement contained precious little by way of targeted support for the most vulnerable and, instead, prioritised tax cuts over public spending. Just last month, the IMF warned the UK Government against further tax cuts, calling instead for a focus on investing in public services and reducing debt; a call that I will echo. The Office for Budget Responsibility (OBR) also highlighted a lack of detail in government returns regarding spending plans, suggesting that it would be — I quote — "generous" to call the forecasts "a work of fiction". That is an unprecedented intervention. The consequences of Tory mismanagement are plain for all to see: households, businesses, public services and, indeed, the devolved Administrations are all under huge financial strain. Unlike Scotland and Wales, however, Northern Ireland faces the additional and unique challenge of having been funded below its independently assessed level of relative need. It is welcome that, after much prevarication, the UK Government have finally conceded that inequity, following negotiations with the Executive parties. The principle of fair funding, based on relative need, was established in an agreement between the UK and Welsh Governments in 2016. Significantly, that arrangement was arrived at in Wales in advance of the Welsh Government's breach of its funding floor. The UK Government have provided £559 million for what they refer to as "overspend pressures". That amount, which accumulated largely under the Secretary of State's stewardship, is deferred for two years and written off only if certain conditions are met. However, we must be absolutely clear: this is not an overspend; it is a product of that very underfunding. That the Government now seek to attach punitive revenue-raising conditions in order that Northern Ireland simply receives the funding that it is owed is demonstrably unjust and unfair. Indeed, the timelines set out by the Chief Secretary to the Treasury are unrealistic and risk setting back financial sustainability rather than enhancing it. Further disparity arises when we scratch the surface of the proposed needs-based factor, which does not operate as a Welsh-style fiscal floor. In fact, it is not a floor at all but a ceiling. Estimates suggest that it could take between 20 and 50 years to return to a point below which we should never have been allowed to fall in the first place. Failure to properly baseline the floor will have a further scarring impact on our public services, with underfunding continuing long into the future and a dangerous and irresponsible cliff edge looming in 2026. In addition to securing appropriate baselining, the level of any floor is critical. My party has long contended that the 124% touted by the Government does not take adequate account of the justice need in Northern Ireland. The time period over which average policing and justice spend, relative to England, was assessed significantly underestimates objective need, focusing on a period during which the budget was disproportionately squeezed and is further obscured by COVID-19 spending. It is our view that the period during which policing and justice spend was ring-fenced, between 2010 and 2015, offers a more reliable reflection of the UK Government's revealed funding preference and, therefore, should form the basis for deriving relative need. That would lift overall relative need to 127%, and there are strong arguments that, by incorporating taxable capacity and benefit rate sensitivity, it could and should be even higher. I am sure that Members from across the House will agree that the work of the Fiscal Council has been indispensable in informing the public debate on the issues. At a time when we are aiming to reform our public services, we must also reform our approach to scrutiny and ensure that the council is now placed on a firm statutory footing. In doing so, there is a strong argument that the council should also be empowered and equipped to assess and make recommendations in respect of the cost of division. Estimated to be anywhere between £400 million and £800 million every single year, dealing with that cost is the gateway to transforming not only our finances but our society.

Of course.

I have great sympathy with the amendment. I have set out very clearly that I agree that the Fiscal Council should be placed on a statutory footing. I am not sure that the Budget Bill is necessarily the best avenue by which to do that. It remains to be seen whether the amendment is within the scope of the Bill. However, I understand that the Department of Finance has been doing work on that, and I ask the Minister to prioritise the bringing forward of legislation in that sense. Although the UK Government's financial offer does not, in and of itself, provide long-term sustainability, it offers space and time for further substantive negotiations on our fiscal framework ahead of the next spending review. As attention turns to those discussions, it would perhaps be useful if a degree of independence were also brought to that process. That is why Alliance has called for the establishment of an independent commission, drawing on the experience of the Holtham, Calman and Smith commissions, to be tasked with independently adjudicating, assessing and setting out evidence-based recommendations with regard to our funding formula and additional powers and flexibilities that may be granted to an Executive as part of a broader fiscal framework. I would welcome the Minister's thoughts on that proposal. Achieving sustainable finances will require a change in not only the quantum of funding that is available but our financial governance. We must, at the earliest opportunity, return to multi-year budgeting in the next spending review. That must be accompanied by increased multi-year flexibility and carry-forward to avoid haphazard use-it-or-lose-it mentalities in Departments and a commitment from the Government to work with us rather than against us to address financial unknowns, such as the PSNI data breach and McCloud. There must also be a serious engagement on the further devolution of powers to ensure that, when we discuss revenue raising, we do it in a way that protects the most vulnerable and is progressive and fair. Only then will we be in a position to offer the stability and certainty necessary to transform our public services, our health service, our education system and our economy. Finally, although I welcome the space that has been granted for Ministers, the Finance Committee and the Assembly to have scrutiny of the 2024-25 Budget by increasing the Vote on Account, I reiterate the need for the Main Estimates to proceed as quickly as possible. As Members have already referenced, many public bodies are operating on budgets that are already insufficient and have recruitment freezes in place, so it is imperative that they have certainty at the earliest opportunity. I am sure that the Minister appreciates the urgency of that.

1,568 words. Text as published by the Northern Ireland Assembly.

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