Debate contribution: Budgetary Pressures

Debate contribution by Mr Eóin Tennyson on 10 September 2024.

MLA

Mr Eóin Tennyson

Party at the time

Alliance Party

Date

10 September 2024

Type

Debate contribution

Business

Private Members' Business

Heading

Budgetary Pressures

Assembly identifier

Official Report component 4517417

Read the official Assembly record

Text

I beg to move

Thank you, Principal Deputy Speaker. Alliance has consistently warned that the Executive have inherited the worst set of financial circumstances in the history of devolution. Prolonged Westminster austerity, the economic damage of Brexit, a global pandemic, war in Ukraine and the cost-of-living crisis have each taken enormous tolls on the economy, our public finances and the people whom we are all here to represent. That squeeze has been felt across the devolved Administrations. Just last week, the Scottish Government announced emergency saving measures amounting to £500 million in order to balance their Budget mid-year. Here in Northern Ireland, that pain has been compounded even further by a funding formula that has not kept pace with need and a cycle of stop-start government at the behest of the two largest parties, which has done untold damage to our public services. The starting point for the debate has to be honesty about the enormity of the challenge that we face. We have some of the worst hospital waiting lists anywhere in western Europe; an under-resourced and overstretched Police Service; creaking waste water infrastructure that is polluting our rivers and Lough Neagh; young people being locked out of housing, and too many parents being forced out of work by crippling childcare costs. However, we cannot simply stop there. Alliance comes to the Chamber not to simply bemoan the problem or decry the challenges that we face but to offer solutions and a credible path forward. Yesterday, the Executive set out a Programme for Government, with plans to tackle those issues and many others and to deliver positive change for everyone in our community. Our ability to deliver on those ambitions will be contingent on a reset of fiscal policy at Westminster, a reformulation of our funding model here in Northern Ireland and serious efforts to deliver financial sustainability and reform locally. I will address each of those issues in turn. It is no secret that the UK Government hold the bulk of the fiscal levers, and so have the greatest influence on the Budget that is ultimately available to the Executive. When the new Government took office, the Chancellor, Rachel Reeves, rightly diagnosed the problem: a £22 billion black hole in our finances as a result of reckless and unfunded commitments that were made by the Conservatives. We are told that the Government will not repeat the mistakes of the previous one, and yet, in June, the Institute for Fiscal Studies pointed out that Labour's plans mean that public services are likely to be seriously squeezed and face real-terms cuts. The Resolution Foundation has warned that, based on our current spending projections, the Government will need to make £19 billion of annual cuts by 2028-29. However you cut it, that is an extension of the very same austerity that decimated public services and communities under the Tories. In 2010, David Cameron told us that we were all in it together. Since then, the superwealthy have amassed greater affluence and wealth, and big oil companies have obtained record profits. Meanwhile, working people in my constituency have been hit hard by a stagnation in living standards, the dismantling of the social security system and spiralling costs, so much so that the wealthiest 1% in society now possess more wealth than the poorest 70%. To be frank, austerity is a political choice, and it is a choice that my constituents can no longer bear. There is an alternative. The UK Government can, and should, take steps towards a more progressive, fair and redistributive system of taxation to end the indignity whereby some of the wealthiest in our society pay a lower overall rate of tax than working people who are struggling to make ends meet. They could, for example, explore a wealth tax or seek to simplify and align capital gains tax more closely with income, as recommended by the Office of Tax Simplification. The Government could also seek to further extend and expand the windfall tax so that energy companies that profit from pollution and rising costs on our constituents pay their fair share. Fiscal discipline is absolutely essential. There is no question about that. However, self-imposing the fiscal rules of one of the most undisciplined Governments is no way to achieve that. Reforming the fiscal rules to adopt a more long-term approach to investment in order to recognise the indirect costs of environmental inaction is a realistic and credible option to generate additional headroom and unlock additional investment in public services. For so many reasons, it costs more to deliver public services in Northern Ireland than elsewhere in the UK. Relatively, we have a larger public sector, greater sparsity of population and a greater number of dependants, to name a few factors. However, for many years, the argument that Northern Ireland was underfunded was dismissed. Well, no longer. The concession of the previous Government that we were the only part of the UK that was funded below relative need is significant progress. However, the needs factor that has subsequently been introduced is not a fiscal floor but a fiscal ceiling and does not adequately address that shortfall, nor does the Alliance Party believe that the 124% proffered actually captures our relative need. Yesterday, we had a debate about the under-resourcing of policing and justice, which is also at the centre of the debate about our funding formula. Although we know that policing a divided society is enormously complicated and costly, the period over which average policing and justice spend was assessed relative to England dramatically underestimated objective need and focused on a period during which the Budget was squeezed for political reasons and spending was obscured by COVID-19. It is our view that the period during which policing and justice ought to be assessed is the ring-fenced period between 2010 and 2015, which actually offers a more reliable reflection of the UK Government's revealed funding preference. That would lift overall relative need to at least 127%, and, by incorporating taxable capacity and benefit-rate sensitivity, there are strong arguments that that should be even higher. In making the case to the UK Government, however, we cannot shirk our responsibilities. That is why we are also calling in the motion on the Finance Minister to publish the promised sustainability plan, setting out the case not only for a revised fiscal framework but for transformation here at home. Failure to adequately grasp the nettle on transformation has in part walked us to this position. Eight long years after the Bengoa review of our health service was published, we now finally need to see a proper action plan for the transformation and reconfiguration of our services. It is also difficult to make the case to Treasury about our dire financial position while, when some Departments can barely meet the cost of essentials, others are making discretionary spending decisions, such as that of the Education Minister to spend £250,000 on magnetic wallets when, the last time that I checked, phones can be switched off and stored for free. How many police officers could that expenditure have funded? How many nurses? So, too, must we finally confront the elephant in the room that is the cost of delivering services in a divided society. Estimates place that cost anywhere between £400 million and £800 million every year, and the refusal of some Ministers to even acknowledge the existence of that cost is not tenable and must change. We will, therefore, not support the DUP amendment, which removes from the motion the very words "cost of division". It will be no surprise to anyone in the Chamber to hear me say again that you cannot achieve sustainable finances without sustainable political institutions. Reform of this place to remove the ability of any single party to block government, or, more importantly, to block progress in government, is essential if we are to make the change that is needed to our public services and stabilise our finances. There is no doubt that the challenges are enormous. They are not, however, insurmountable. With a new Executive in place and a new Government at Westminster, there is a renewed opportunity for change, and, for our part, we in Alliance will not shirk our responsibilities in leading that change.

1,376 words. Text as published by the Northern Ireland Assembly.

Assessment

Not flagged

Jev’s structured answers

Assessed 21 October 2026 at 11:02 UTC by jev-1.13.0 (requested as typesafe/jev) under rubric 2026.10-r9, methodology 1.9.

Disagree with this assessment?

Classifications can be challenged. A person reads every challenge, and any change is recorded publicly above with its reason.

Challenge this classification