Debate contribution: Northern Ireland Fiscal Council Bill: Consideration Stage

Debate contribution by Mr Matthew O'Toole on 5 May 2026.

MLA

Mr Matthew O'Toole

Party at the time

Social Democratic and Labour Party

Date

5 May 2026

Type

Debate contribution

Business

Executive Committee Business

Heading

Northern Ireland Fiscal Council Bill: Consideration Stage

Assembly identifier

Official Report component 5524777

Read the official Assembly record

Text

These are very important amendments. We spend a lot of time debating non-binding motions, and it is important that the House considers actual legislation and amendments to legislation in detail. That is not to say that non-binding motions are not important — we are moving one later today — but it is important that we discuss these matters, and I intend to give them proper consideration, as the House would expect, given both the roles that I hold. I talked about amendment No 1 and the logic in aligning a Programme for Government (PFG) with a Budget and ensuring that the Fiscal Council is mandated to properly test and tell the public whether the Programme for Government aligns with the Budget. The Bill has the flexibility to give the Fiscal Council the power to do whatever it likes, within reason, but the Bill also makes a specific choice to mandate the Fiscal Council to do specific things. The amendments create a specific obligation or expectation that the Fiscal Council will do specific things, but they are designed to be flexible, and they do not create onerous additional burdens. I want to be clear about that. However, the alignment between the PFG and the Budget is critical, and specifically asking the Fiscal Council to ensure that there is a commentary on how well those two things are aligned is a natural and essential step forward for scrutiny. If we were not to pass that today, people in the outside world would rightly wonder why not. They would ask what the Assembly or the Executive have to fear from the Fiscal Council simply being asked to reflect on this in relation to the legislation. That is amendment No 1. Amendment Nos 2 and 3 are connected. They are mutually exclusive, but I tabled both for a reason. I did so because it is important that we debate properly in the Chamber. A lot of time is spent on non-binding motions, but this is an opportunity to talk about amendments and, in a sense, offer the Assembly a choice. I am of the view — I said it earlier — that we do not discuss economic impacts enough in this place. It is one reason why the public are frustrated and why some of our political debate touches on only half the point. Due to the nature of the devolved spending settlement, we, of course, focus on how much money we have and on the fact that we might want more money from the UK Government. Those are legitimate questions. We have had a lot of debate about the calculation of relative need here in Northern Ireland. That is an essential debate, but it is also important that we debate the economic impact of policies. Economic impact does not straightforwardly mean growth, albeit the Assembly will note that, today, we have had a rather concerning forecast from Ernst and Young (EY), one of the few bodies that does a Northern Ireland-specific economic forecast, which suggests that our economy will grow by 0·7% this year. That is due to a range of things, including our particular exposure to the crisis in the Middle East, which, we all know, was prompted by Donald Trump, and the pressures that it has created, and, possibly, to some extent, the constrained public spending situation. That will have an economic impact in Northern Ireland. The lower economic growth in Northern Ireland will have a range of impacts. It will mean that there will be fewer jobs created in our constituencies and less money to spend on our high streets. All of that will feed through to the Finance Minister and the Executive through other pressures that will be created. They will not necessarily be direct fiscal pressures, but, in some cases, they will be fiscal because rates revenue and the amount of rates that goes unpaid is, in part, driven by economic activity or lack of economic activity on the high street. The fact that growth is going to be at just 0·7% in the North, this year, also means that more people than would normally be the case will be in receipt of benefits, seeking assistance or under pressure in some form or other. We know that lots of people are under pressure because of the huge increase in the cost of diesel and home heating oil. Every policy that we pursue will have an economic consequence, but we rarely debate them properly; we sometimes touch on them or allude to them. Amendment Nos 2 and 3 offer a choice. They offer the Fiscal Council the opportunity to give us, and the public, commentary on the economic consequences of decisions that are made or not made. I will give a few examples, because I do not want people to think that it is about one perspective. The Minister has talked a lot about external commentators in relation to Executive choices. There are external commentators who have a particular view about decisions that are made or not made by the Executive, but every one of those decisions would have economic consequences — potential upsides and downsides — that would need to be understood. Take, for example, decisions on Northern Ireland Water and funding it, albeit I do not think that there is any appetite for introducing water charges. If we were to think about increasing borrowing — the Minister has done a little bit of that — to pay for investment in Northern Ireland Water, one would imagine that that would have economic consequences and impacts, amongst which would be the building of more houses, more economic growth and, therefore, more jobs for people in Northern Ireland. Therefore that is a legitimate thing to discuss. People from a different political perspective have talked a lot about public-sector wages — I do not agree with those people. Historically, public-sector workers in the North have struggled with the lack of pay parity and have had to strike and take industrial action. It is also true to say that, if they do not receive pay parity, there is less money for them to spend in the shops, small businesses, pubs etc. To be clear, my suggested amendments do not mandate, nor should they be understood to mandate, the Fiscal Council to produce a macroeconomic forecast. That would be a big deal, and we heard in evidence at the Committee that it would not be something for which the Fiscal Council would have capacity. I was curious about that as a potential measure. Having taken and heard the evidence and having thought about and considered it, I do not think that it would be practical to ask the Fiscal Council to produce the kind of things that the Office for Budgetary Responsibility in London produces, such as a twice-yearly updated forecast of growth, unemployment, inflation and a range of other things. I do not think that that would be a responsible expectation for the Fiscal Council, but I do think that it is potentially reasonable to ask the council to do that when, as the Bill says, it is considering its Budget assessment reports and considering the impact of the Budget on the economy of Northern Ireland. That does not require a forecast and would not require huge additional resource; it would simply require the council to do some level of macroeconomic analysis of the impact. That would genuinely improve our policy debate. It is worth saying that there is, as it were, a parallel precedent for there being an economic context to the Budget, because every Budget, certainly since I have been in this place, that has been produced by the Department of Finance includes an economic chapter at the very beginning and says, "This is the context for the local economy. This is where growth is. This is where we think the economy is". There is then a whole series of chapters on individual Departments. There is a legitimate question about how connected that economic analysis is to the judgements or decisions made latterly on Budget allocations. All I am saying is this: let us join that up a bit more, and let us have more of a conversation about economic impacts. There is no particular left/right or unionist/nationalist persuasion to this; it is simply about us doing policy better. Amendment Nos 2 and 3 are mutually exclusive, and I will explain why that is the case. Both amendments amend clause 3, but amendment No 2 places an equality of consideration of economic impacts alongside the various other requirements on the council under clause 3. Therefore, it is giving, in a sense, equality, as in it is saying, "This is one of the things that is closer to the level of consideration that has to be given to clauses 3(2)(a), 3(2)(b) and 3(2)(c)". Amendment No 3 is a little bit more muted in that it says — I will not go through the text and where it falls — that the council:

"may include consideration of the potential impact of the proposed budget ... of Northern Ireland".

That gives the Fiscal Council more flexibility, and it is designed to give the Fiscal Council more flexibility. We discussed some of this in the Committee. It cannot be said that we are putting an onerous or unacceptable burden on the council's resources. The amendment gives the council the power and specifies that we think that it may want to use that power to analyse proposed potential impacts. I would rather that we pass amendment No 2, but I am also content with amendment No 3, if there is a majority for it in the House. I am genuinely intrigued to hear what other parties, including Executive and non-Executive parties, think about that, because I genuinely do not understand why we would not do this. I put down both amendments because I am keen to hear debate and hear what objection or support Members have for either of those amendments. Hopefully, there will be some response, and I am more than content not to move one of the amendments if there is a preference for the other. I am really clear that one of the most consistent frustrations that I have had, not just since I have been leader of the Opposition but since I have been an MLA, is that we do not talk often enough about economic impacts. If the Minister has announced an aspiration to devolve more fiscal powers to him here, he and I share that aspiration. Others in the Chamber do not, and I respect that, too. This is without prejudice to whether we do that or not, but, whether we do that or not, we need to have a much richer debate about economic impacts. That would serve not just the business community but workers and families in this society and would add to the quality of debate. Amendment Nos 2 and 3 are mutually exclusive, and I hope that Members are able to support at least one of them. Obviously, if they support one, the other one will be defeated. I am happy to hear from Members, and I am also happy to take interventions and answer questions as the debate goes on. Amendment No 5 is also in my name and is similar to an amendment put down by Mr Tennyson. We know, here in Northern Ireland, that there have been lots of reports about the pernicious effect of what is often called the "cost of division". It is not called the cost of division in either of the two amendments that we are debating today; it is called the duplication of public services.

There have been various reports from Ulster University, Deloitte — in relation to policing — and various other sources that have talked about the fiscal consequences.

There may be economic consequences, but we are not asking that the council look at them. They are fiscal consequences, which are the consequences for public spending from having to duplicate public services and therefore create additional pressure at a time when there is already real pressure. The Minister tells us all the time how much pressure there is. We know the constraints that there are on other Ministers' budgets. It is reasonable for us to get a proper estimate of those costs from the Fiscal Council. To be clear, I cannot speak for Mr Tennyson, so I will not, but we are talking about broadly the same thing and are probably in broad sympathy with each other's amendments. My amendment No 5 relates to clause 4, which deals with fiscal sustainability reports. They are the more thematic, longer-term reports that the Fiscal Council produces, not the annual Budget report. It would not be practical to go through every annual Budget and say, "There is duplication of services here, there and everywhere". Fiscal sustainability reports are thematic. They allow the Fiscal Council to look at an issue. It has produced several of them in the past few years. It is not unreasonable for us to make a specific request of the council that it look at the cost of duplicating services; in fact, it would be a healthy thing for it to do. It may well throw more light on the issue. It may be that some of the numbers that have been quoted — the hundreds of millions of pounds a year — are either not borne out or are borne out in ways that surprise us. The council would not be making policy decisions. It would not be making decisions for the Minister of Finance or, indeed, any other Minister. This would simply help improve the data on which we make policy decisions. Those are our four amendments, two of which are mutually exclusive. They are, I hope, reasonable and sensible. To repeat, they do not place a significant additional burden on the Fiscal Council. I hope, as the proposer of the amendments, that my words will reassure Members that it is not my expectation or intention that they will create significant additional burdens on the Fiscal Council. It is, however, my contention that the quality of our policy debate is not good enough. I do not think that anybody could argue that the quality of government overall — something for which we are collectively responsible — has been good enough. As the Opposition, we are relentlessly focused on improving our accountability and scrutiny. Sometimes, that involves moments of robust challenge and even theatrical display. Today, however, is about creating in law more power for that really important watchdog, the Fiscal Council, to report and give clarity to us as MLAs, to the public more generally and to the media and the people who report on such things, so that we can have robust and better policy outcomes. The amendments are reasonable. They would improve scrutiny when it comes to delivery of the Programme for Government, the economic impact of our policies in the Budget and understanding the cost of division. I commend the amendments to the House. I very much hope that colleagues in the Executive parties, in the spirit of constructive engagement and improving how we do government here, will be able to support them. I am happy to answer any further questions about them. I genuinely do not understand why colleagues would not support the amendments, but I hope that they will. Thank you all for listening to me.

2,578 words. Text as published by the Northern Ireland Assembly.

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