Stephen Farry
North Down · Alliance Party · Northern Ireland
“Speaking for a party that has a longer pedigree in advocating a public inquiry than both the DUP and Sinn Féin, I nonetheless welcome this announcement, despite the torturous path that we have had and, indeed, the missed opportunities.”
“The first was a reform of the petition of concern to take it back to the original intent when it was designed in 1998. It was clear at that stage that Arlene Foster banged the table and said, "No, never. We are not doing that. That is a way whereby we are going to have to fold on equal marriage: it's not happening".”
“<BR /> <BR />The main points that I make concern the substance of the order. There are probably three aspects that the Minister needs to address properly before the Assembly, and they really relate to what other options he has.”
“That raises the question of why they want to go as far as 2022, especially when I am not sure — I would welcome any clarification to the contrary on it — that there has been formal Executive approval of this.”
“<BR /> <BR />There are three major substantive issues that I do not believe have been properly aired on this: VAT; European Commission infraction proceedings; and, most important, the opportunity foregone to revisit the classification of Northern Ireland Water and the ability, through a separate water charge, to allow it to borrow commerc…”
“While my party was supportive of the Good Friday Agreement back in 1998, at that time, we expressed some reservations around the very detailed nature of the proposals and how those could, in due course, destabilise Northern Ireland and prevent us from realising our full potential. We have been very much vindicated in that analysis.”
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“Let us be clear that there are many, many issues for us to address: access to the single market, which, let us not kid ourselves, is the single biggest reason why companies want to invest in Northern Ireland; the future of our public finances, which are already precarious; and the fact that we face a shrinkage of the Northern Ireland economy. For the benefit of Lord Morrow, the reason why we are saying that we are the sixth largest economy rather than the fifth is that, with the "Leave" vote, France overtook the UK overnight. It has implications for the Good Friday Agreement and for where our border will be in terms of the free movement of people and goods. These are all issues that the Executive have to take —”
“Will there be any capacity to seek special modifications or recognition of any special status for Northern Ireland? Those are issues that are very much on the minds of the people and business community of Northern Ireland today.”
“I need to move on, sorry. Will there be the capacity in the Executive and the Assembly to argue for Northern Ireland in taking our special circumstances into account?”
“At the start of the Member's comments, he referred to the victory of the ordinary people: the people on the other side of the argument are also ordinary people. Hopefully, that addresses that. <BR /> <BR />Let me come to the crux of the issue of where we find ourselves as an Executive and an Assembly. This is for the DUP in particular: Northern Ireland has voted to remain. That is a matter of fact. We are also a separate entity in the context of the overall UK. There is an issue for the First Minister as to whether she and her party will recognise those special circumstances in how we move ahead. Arising from that, will there be the capacity in the Executive —”
“No, I need to press on. Let me also be clear about the argument that this is about the ordinary people versus the elites or the Establishment. We have had a lot of comments that have been very disparaging of people who voted to stay in: they are ordinary people as well. This is, fundamentally, a battle within the Tory Establishment. It is not the Establishment versus the people; this is a fight within the Tory Establishment, with the people of the UK as their plaything.”
“<BR /> <BR />I hear comments from people, most recently Lord Morrow, about the importance of taking control. That was the mantra of those who advocated taking us out of the European Union. Let us be clear: no one is in control. We have an absolute mess. We have Boris Johnson scrambling around, as one commentator put it, trying to find the pin to put back into the hand grenade that he has set off. There is no leadership whatever, and no one is taking control of the situation. There was no plan before for what would happen in the case of a vote to leave, and there is no plan today for where we are going.”
“To be accurate, that is framed only in terms of the issue of whether we are part of the UK or a united Ireland, but I make the point to stress that we have the ability to take our own decisions and are a separate place in how we are seen by the UK as a whole, the European Union and the wider world. <BR /> <BR />The consequences and implications of Brexit will be massive and far-reaching for Northern Ireland, the UK as a whole, the island of Ireland and, indeed, the rest of the European Union. A lot of dominoes could fall over the coming months and years. We have set ourselves on a path, but we do not know our destination. Certainly, staying in the European Union had a certain risk and uncertainty, but that is nothing like where we find ourselves today.”
“We are familiar with the fact that, for example, we have separate football teams — as an aside, let me say, "Well done" to Northern Ireland; I am sure that the House will join me in congratulating the team on its outstanding success in the Euros — and we have the reality of devolution in Scotland, Wales and Northern Ireland. Scotland is a kingdom with its own separate history, and they have now established a principle that they can do things differently. In Northern Ireland, we are very much a place apart, particularly in the context of our land border on the island of Ireland. We also have our very particular constitutional settlement based on the Good Friday Agreement, with a three-stranded set of relationships and, importantly, the ability of the people of Northern Ireland to determine their future through the principle of consent.”
“It is appropriate that we have this debate today. It is a shame that it is the Opposition who have brought it to the Floor: this matter affects all of us. It is perhaps the most serious issue to face the Assembly during its entire existence; indeed, it is perhaps the most serious issue to face the UK since the Second World War. Let me also be clear that I accept that this is a UK-wide vote, and we have to respect the outcome, no matter what position we took on the referendum. We have to deal with the consequences and implications that flow from it. <BR /> <BR />Equally, it would be wrong to work on the basis that the UK is a unitary state and we are all now lumped in together on where we go and what the future is. Look at the very name of the UK — the United Kingdom of Great Britain and Northern Ireland.”
“I welcome the Minister to her new post. She will be aware that her permanent secretary said to the relevant Committee that it could take until 2029 — yes, you heard me right — for this move to be completed. Bearing in mind that it will cost the public sector money, what assessment is the Minister making of the risk to business continuity and the service that her Department provides to a whole range of stakeholders? Is she prepared to give the House a guarantee that there will not be any impact from this costly move?”
“My question is also on Europe. Given that the First Minister is the only leader or co-leader of any devolved Administration in these islands who advocates a Brexit, will she relay whether concerns were expressed by the Scottish or Welsh First Ministers or an Taoiseach about the implications of a Brexit for collaboration between the regions of the British Isles, particularly the creation of some type of border for people or goods on the island of Ireland or between the island of Ireland and Great Britain or the effect on investment decisions arising from the distortion of the single market?”
“I too wish the new Minister well in his post. Given that Northern Ireland has a much higher dependence upon European funding for R&D spend than most other regions of the UK, how does the Minister envisage making up the shortfall in research funding in the event of a Brexit? We cannot rely on the UK Government to replicate the level of funding, not least given that the Barnett formula would not essentially cover what we are losing, even if the Government were minded to actually meet the Barnett formula level of funding?”
“Where I have a fundamental difference is on the speed and rate at which they are doing it. They have had options on that, so they do not need to pay down the deficit at the rate they are. There is a point for us to continue to make on that. <BR /> <BR />I am concerned, however, that if we simply focus on what London are doing vis-à-vis ourselves in Northern Ireland, we will take the eye off the ball of the need to reform ourselves here. I think, frankly, if we have that very strong process of reform, we have a much stronger foundation for asking for additional borrowing, especially if that borrowing is then going to be linked to funding that process of reform, essentially on a massive invest-to-save basis that would make our public finances more sustainable in the long-term.”
“If there is an uncertainty in the system, what are the implications for the long-term position of the Executive and the message we are communicating to businesses, not least given that Invest NI is out courting businesses to invest in Northern Ireland on the basis of there being a lower rate in 2018? Between himself, the Economy Minister and the Executive as a whole, I think we need a shared, collective statement across the piece, rather than one party saying one thing and a different party saying something subtly different so that people see that there is, in practice, a difference of emphasis, if I can put it no more strongly. <BR /> <BR />In the context of where we sit with regards to London, I certainly accept there is a need for the UK Government to rebalance their books.”
“Rates capping removal would raise only a few million pounds to begin with, but, again, it is symbolic. It is about our values and trying to have revenue as consistent with progressive forms of revenue raising as we possibly can. <BR /> <BR />I also think the Minister needs to come back and clarify what he is intending to do on corporation tax, because despite what was said yesterday, there is this latent uncertainty in the process. The Minister is saying he is confident that he will negotiate what he needs to negotiate on the resources from Treasury, but as the Minister will well know, any negotiation is never certain.”
“I do not think that is a good example of the wise use of public money by the Government. <BR /> <BR />I am conscious of the need to break for lunch soon, but I want to make a couple of very brief points. We need to look actively at the issue of revenue raising, and that needs to come in the context of addressing the cost of division first and looking at issues of tackling waste and inefficiency. Just to remind the Assembly, we have some existing powers; for example, the use of the regional rate and the removal of rates capping. I appreciate Sinn Féin is now dabbling in this area, but there have been votes in the past 10 years in the Assembly where that party has not supported an increase in the regional rate and where the opportunity has been forgone to overturn rates capping.”
“<BR /> <BR />That leads into the issue of the resources that are being used with the public sector transformation fund in education. I see that that scheme is now unwinding, and money is being surrendered back to the centre. I found it bizarre that we were going to spend public resources to encourage existing teachers to leave their jobs to try to provide job opportunities for young people who had trained as teachers but who could not find a job because we are training too many teachers in the first place. The most logical thing to do would have been to address the flow of teachers being trained rather than keep the tap flowing as ever before and simply try to spend more money, having already spent money inefficiently on teacher training in the first place, to address the problem that was created.”
“<BR /> <BR />Comment was also made yesterday about teacher training and the opportunity for its reform. The amount of money for teacher training may be relatively small in the big picture of budgets, but, in some ways, it is the front line of the challenge as to whether parties are serious about investing in a shared future and a different way of doing things. If we cannot train our teachers in a single, shared system it begs the question of how on earth we will get our schoolchildren in substantial numbers into that type of format. I was disappointed, not least that Mike Nesbitt very readily dismissed the fact that his party voted to overturn the steps that I was trying to take, both in the Executive and on the Floor of the Assembly, as did the other four parties in the Executive at that time.”
“I recognise the argument in favour of local delivery, but that does not negate my point that you can set up structures, through which there is much tighter control on governance and audit issues, and still create delivery structures with advisory groups that help in that regard. For example, with the Pathways to Success strategy, we have a very active NEETs forum that helps and advises officials on the allocation of funding. A lot of what is being achieved could be achieved differently but without the degree of risk that has been run. I hesitate to make predictions, but there may be some adverse comments in due course from the Audit Office about the value for money in public spending when the schemes have bedded down for a significant time.”
“<BR /> <BR />Importantly, when money was earmarked for the social investment fund, it was in the context of cuts being passed on to Departments, so a lot of work that could have been done by Departments was hampered by the fact that our budgets were trimmed to produce that ring-fenced money for the social investment fund.”
“With the Department for Communities and the Department for the Economy under the current structures — the Department for Social Development, the Department for Employment and Learning and the Department for Enterprise, Trade and Investment under the previous system — the opportunity existed for new schemes to be run through Departments for which there would be tighter governance and a much tighter audit process. <BR /> <BR />Departments can work in partnership with the community and voluntary sector. I did that with the NEETs strategy, Pathways to Success, and we distributed money on a sustainable basis to a number of different groups, some of which are actually benefiting from the social investment fund as we speak. The evidence is there that that can be done on a more sustainable basis.”
“I said yesterday that I believe that this fund, in its entirety, was a mistake and should be done away with. That is not to negate the importance of government engaging with communities, particularly marginalised communities, and seeking to ensure grass-roots community development and economic development. The difficulty that I have with the fund is that the governance risks are substantial. <BR /> <BR />There are also risks with fragmentation and how money will be spent. While people can point in absolute terms to the success of the fund and say, "This would not have happened without the fund", it does not take into account the relative opportunity that exists of working through Departments.”
“<BR /> <BR />In many respects, it is a good thing that we are faced with these challenges and opportunities, but, if we try to match that healthcare inflation, the distortions in the rest of our budgets will be massive and unsustainable. This has to be a very important driver of reform. Stating what your input will be cuts across what is the outcome-based focus of the Programme for Government framework document. To be clear, my party is comfortable with the ethos of that process but sceptical about some of the measurements, targets and indicators that have been set out. Health reform is important. We need to decide what change we will make and then resource that change, rather than simply making a very bold promise on the amount of money that will go into it. <BR /> <BR />A number of people have commented on the social investment fund.”
“It will not be easy, but there are tough decisions ahead on rationalisation, which will, of course, be helped by an integrated area planning process rather than the piecemeal approach that has been adopted to date in many respects. <BR /> <BR />I am still very concerned about the big headline commitment that has been made by the DUP and Sinn Féin to an additional £1 billion for health. I appreciate that there is a need for additional spending in health. Healthcare inflation, based upon our current model of provision, is running at something like 5% to 6% per annum, which is an incredible fact to try to get your head around. That stems from a changing demographic, an older population and more expensive drugs and treatments.”
“It is important that that does not sit on the shelf but becomes an active document whereby Departments are challenged on how they can do better in the provision of their services in the context of a divided society. <BR /> <BR />We also have inefficiencies in what we do in education. Part of that is obviously related to the fact that we have a number of sectors and a degree of segregation in our system. It is worth stressing that it is a very heavy degree of segregation. As my colleague Trevor Lunn mentioned yesterday, we are still talking about around 70,000 empty school desks. I believe that our school-age population is about 320,000 or 310,000, so we are talking about potentially 20% of our school places being empty. That is a level of inefficiency that most societies will struggle to justify. It has to come down.”
“We will still need to ensure that we fund apprenticeships at the appropriate level, and that money may not necessarily be enough. It might help to cover other areas of youth training or working with companies on what they are doing with their existing workforce, but we need to be careful not to fall into the trap of thinking that the money will simply address all our apprenticeship needs. Hopefully, we can return to this issue in the future. <BR /> <BR />There are structural issues in the Budget, and I want to highlight a number of themes that we need to be very mindful of. First, we still face an embedded cost of managing a divided society. We have had a succession of reports, the most recent of which was from the University of Ulster's Economic Policy Centre, which was published by DFP in March this year.”
“John O'Dowd referred to the apprenticeship levy, and I very much agree with his sentiments. This is not about investing in apprenticeships but about a different form of raising money from our business community, and it does cover the public sector. It is designed to address the deficit in terms of the UK as a whole and to try to pump-prime the English approach to what they term apprenticeships, which is a dumbing down of what is involved. <BR /> <BR />In Northern Ireland, we are much more in tune with the European standards of apprenticeships. We try to base what we do on quality and ensuring that we provide what employers need. In addition to the funding challenges that will come from this, it will come as a Barnett consequential to the centre.”
“The £20 million that was confirmed today is already factored into the budgets of FE colleges, universities and apprenticeships. It will not provide new starts as we stand today, but it will head off further cuts in the current financial year. I certainly welcome that, but people should be under no illusion that this substantially addresses the skills pressures faced in our economy.”
“So, it is important that we have a mix, and we have to be mindful of that. <BR /> <BR />Based upon the figures of my outgoing Department, beyond the £20 million that has been allocated and confirmed today, by 2019-2020, we will need to spend an additional £85 million per annum on skills if we are to achieve those outcomes and meet the expected demand in our economy. Some of that may dovetail with the hoped-for expansion of the Magee campus in Derry. I am very enthusiastic that that happens, and I have done a lot to make it happen, subject to the constraints of resources. We have, potentially, a very exciting future there, but it is important that everyone in the Government fully understands the scale of what is required on skills interventions if we are to meet that demand.”
“Depending upon the course of study, that varies between £1,000 and £2,500 per head. That will go to the heart of the quality of what we produce. The issue is not simply the volume of graduates that we produce in Northern Ireland but their quality. We know that Invest Northern Ireland is setting this area as an investment location based upon the quality of our universities and our graduates, so it is important that we do not allow that to erode. <BR /> <BR />The third issue is our expansion demand. If we are to meet the needs of local companies and investors coming in, what do we need to put in place to ensure that they have the pipeline of talent and, indeed, that that pipeline is being directed to the most appropriate areas? Not all of that will be the traditional model of a university degree; it may be a high-level apprenticeship.”
“If we look to our universities as a key area of intervention, we see that there are three particular aspects that are important to bear in mind. First, the cuts that have been passed on in recent years have seen a reduction in student places and staff posts and, indeed, the consolidation of some courses. A lot of that is counterintuitive and will have an implication for our widening participation agenda. That is of massive concern to a lot of people and, indeed, to the future of our economy. Those cuts are still in the system; we have had only one year of them working their way through, with the second year about to hit us in September 2016. <BR /> <BR />On top of that, we have a structural gap between Northern Ireland and the rest of the UK, which manifests itself in the amount of money that we spend per student.”
“As we look ahead, especially to a lower rate of corporation tax, we need to ramp up the investment that we are making in skills across a very broad front, including universities, our FE colleges, apprenticeships, and what we are doing with marginalised young people. All those interventions are critical. There is a range of policies and programmes already in place that can help us to do that, but we need to scale those up considerably. <BR /> <BR />The Minister is disappointed that I have not been more warmly welcoming of the allocation of £20 million. It might be useful to explain why I am not as enthusiastic about that allocation as some would have expected. We have had a number of cutbacks to skills interventions over the past four or five years, in particular.”
“Yesterday, we tested the views of the various political parties and MLAs on the current Budget situation. That was the first opportunity that we as an Assembly have had to do that since the election and the start of the new mandate. With the passage of the Supply resolution yesterday, we are now locked in much more tightly to the Budget situation as we find it. That said, we still have significant concerns about the Budget, and it is worth developing and highlighting some of those in a bit more detail today. <BR /> <BR />At the outset, I want to touch on the issue of skills, which was raised this morning and, indeed, has been touched on by a number of Members already in the debate. As the Assembly, and the Minister, will know, skills are critical to the transformation of our economy.”
“Will he clarify whether the £20 million is to be baselined, as was the intent of his predecessor in his correspondence to me in my previous role?”
“I congratulate the Minister on his efficiency with the June monitoring statement. I do not believe that any procedures have been broken by the manner in which the statement has been brought to us today, but there is a genuine issue around transparency on the full pressures being faced across Departments. Hopefully, the Minister can rectify that gap. <BR /> <BR />On the additional money for skills — I welcome his following-through on the commitment made by his predecessor — does the Minister recognise that the £20 million will only avoid further cuts happening on an in-year basis? If we are to see proper investment in the transformation of our economy through future Budget rounds, there needs to be a further ramping-up of investment in skills across apprenticeships, FE colleges and, indeed, our universities.”
“I thank the Minister for giving way. He takes the position that no party wants to throw money at the health service, but we are committed to £1 billion. How does the Minister know it will be £1 billion? It could be more, or, if the reforms are very successful, it could be less. Why stick a stake in the ground that it must be £1 billion at this stage?”
“I am grateful to the Member for giving way. I appreciate what he is setting out and that there is an issue, in his mind, about affordability. Certainly, from our perspective, there is an issue around skills. However, the potential problem is that your colleagues in the DUP are saying that this is happening — no ifs or buts. Invest Northern Ireland is out selling Northern Ireland as an investment location today on the basis that this will be in place for certain in April 2018. There is a mixed message coming from the two parties in the Government.”
“I am grateful to the Member for giving way. Does he recognise that the two parties that went into the last election making the single biggest promise on spending were his party and Sinn Féin with respect to an extra £1 billion for Health? All of the other parties' spending commitments were dwarfed by that.”
“Does the Member also recognise that the issue was brought by the Justice Minister repeatedly to the Executive, but it was blocked by the two parties that controlled the Executive agenda.”
“That is an alternative, so do not say that we have not put one forward.”
“We need to end rates capping and prescription charges. There also needs to be some modest increase in the regional rate. All those things could be done this year by the Executive.”
“<BR /> <BR />I know that the Minister will say, "Well, it is all and well good for you to say all these things, but where is the alternative? Where are the different proposals for how you would do things differently?" Let me set out a few things. Maybe my colleagues will explore these in more detail, and I will touch on them tomorrow. For example, we believe that we should cancel the social investment fund; Departments can carry on that work. We should cancel the relocation of DARD to Ballykelly, as it is costing us money, we do not need to do it, and it will create massive issues for business continuity. We should address teacher training. I am flabbergasted that Mr Smith referred to the inefficiencies in teacher training when his party overruled me at the Executive when I tried to do something about it.”
“We are not addressing the cost of a divided society. A report from Ulster University's Economic Policy Centre, which is gathering dust on the shelf, points to major distortions in our public spending. We are well aware of distortions in health and education spending at present. We have get to grips with serious reform in that area. I am concerned that there is an intent to spend, potentially, an extra billion pounds a year on health by 2021, which the DUP and Sinn Féin have signed up to. That will not be credible or sustainable. We have to look at what reforms are required and put money behind them rather than simply making a pledge about resource input, especially if we do not consider any other reforms. For some Departments and agencies, that will potentially mean cuts as high as 20%.”
“<BR /> <BR />I am concerned, for example, that we are not planning ahead sufficiently for a lower rate of corporation tax. I agree that the Minister needs to clarify the Executive's position. Is it, as Emma Little Pengelly suggested, definitely happening in 2018, or is it, as the Minister suggested, subject to affordability? Those are contradictory statements. One is right; one is wrong. Please tell not just the Assembly but the business community of Northern Ireland and internationally what our plans are for it. <BR /> <BR />It is not just about having certainty about what is happening but about investing in skills and infrastructure, and no steps are being taken to turn the tap on in the right direction. In particular, the skills funding deficit will be approaching £85 million per annum by 2019-2020. We have to step up in that regard.”
“So there is a major issue here with how we got to the Budget that is before us. The process was flawed, and it came in the wake of Fresh Start. You could not find a more negative demonstration of the words in Fresh Start about how decisions were to be taken than the process used for the Budget. <BR /> <BR />I have concerns that the Finance Minister is seeking solely a narrative around blaming the UK Government for our financial situation because of the way in which they have addressed the UK deficit. Of course that is a factor, and we have to lobby them in that regard. However, if that allows us to take our eye off the ball in the reforms that have to take place in Northern Ireland, we will miss a major opportunity to put our finances back on a strategic footing.”
“I will set out the issues that we have with the situation that we find ourselves in. We do not believe that the Budget agreed by the Executive and the Assembly is either strategic or sustainable. We voted against it in the Executive and in the Assembly. The process was badly flawed, and it is not a good piece of work. The context, of course, was set by a very late spending round in Westminster, and the issue came to the Executive towards the end of December. There was no draft Budget, and so the Budget was presented to at least two Executive parties with an hour's notice and then rammed through the Executive without any discussion. Facts have proven subsequently that there was time for even some sort of structured consultation with some key stakeholders, but that was passed up.”
“If the opportunity exists to have that rethink, and if people believe that it is necessary, that is best done in the context of the formal Supply resolution and Bill rather than for it to be left for scrutiny in the spring Supplementary Estimates in February 2017.”
“I believe that there is an opportunity for the Executive to take the Bill back and reflect further on the points that I and some of my colleagues will make today and, indeed, those from other parties will make. <BR /> <BR />We have a further complication, in that there are suggestions that there may be a need for some form of Budget rewrite on an in-year basis. The Budget may well be unravelling as we speak. If that is the case, it is not sufficiently democratic to rewrite a Budget through a monitoring round. A monitoring round is there to reallocate underspends from one Department to another. It is tinkering on the edges, but, if we go back to the situation that prevailed a couple of years ago in which we were passing severe cuts in-year through monitoring round decisions, that has to be subject to proper accountability and scrutiny.”
“1) Bill in February and March and then a separate discussion in June, or even in July, is to allow for greater scrutiny of the Budget and the Supply resolution at this point in the calendar. The point of the first Bill is to allow the Vote on Account to proceed in order to get the money flowing through Departments before taking a step back and having some more detailed consideration. If we are not prepared to do that at this stage, we may as well wrap up the whole process in the one piece of legislation in the spring and get on with it rather than go through a charade at this point. It has to be meaningful and be about setting forward alternatives.”
“First, I join in welcoming the Minister to his new post. I wish him well. Today is the first opportunity for the Assembly in the new mandate to discuss Budget issues and to take a position on the public spending situation as we go forward. As much as I am critical of the positions that have been adopted by the Executive parties, I am slightly concerned about the timidity of the parties in opposition who are allowing the motion to go ahead today as some form of fait accompli. It is our intention to seek a Division later this afternoon or this evening, whenever the vote comes. There are good reasons why we should not simply treat this as a given. <BR /> <BR />First, the Assembly has until the end of July to pass the Budget (No. 2) Bill, so there is still time in this process. The entire point of having a Budget (No.”