Simon Hamilton
Strangford · Democratic Unionist Party · Northern Ireland
“I have emphasised to the Member and the House before, that, whilst I accept that those are not good enough — that is why we have been developing the plan — there are alternative technologies in place that can present opportunities for those who just cannot get acceptable speeds.”
“I thank the Member for his intervention. There are some initiatives that I believe will help and act as a driver to improve broadband access. One such intervention is the broadband universal service obligation (USO), which is being taken forward by Her Majesty's Government.”
“I thank the Member for his question. However, he is conflating two issues. I wrote to his party leader, and indeed to all Assembly party leaders, before making the announcement that I did last week about wanting to publish the details of the businesses in receipt of the non-domestic RHI scheme. It was my intention to do that tomorrow.”
“<BR /> <BR />The Chancellor, in his autumn statement, made some more funding available for telecommunications, and my Department is studying that and seeking to avail itself of that to the fullest possible extent.”
“In addition, my Department is managing a contract for the delivery of the superfast rollout programme, which, by 31 December, will provide access to superfast broadband with speeds of at least 24 megabits per second to a further 38,000 premises, both business and residential, across Northern Ireland, including in the Newry and Armagh cons…”
“I signalled the intention to do this a few weeks ago. The Member and the House will know that inspections of all installations would have taken place over the 20-year lifetime of the RHI scheme.”
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“Scotland, as I have pointed out in this House before, is very much the UK average industrially and in its ability to live within its means and absorb some of the shocks that come with that degree of devolution. Northern Ireland, in my view, is simply not in that place. Seeking devolution of corporation tax, which is there and available to us, is enough for the Assembly to contend with at this time. <BR /> <BR />My party colleague Paul Girvan talked about the presentation of severe cuts by many Ministers as a negotiating tactic during the consultation, and, indeed, Trevor Clarke did the same from a DRD perspective. Of course, I would not be so indiscreet as to talk about Executive colleagues doing that, but there may be some merit in the point that Mr Girvan made. He also talked about, to use his terms, our "over-inflated" public sector.”
“This is a very inside baseball — to use the term — sort of discussion that the Member and I might be drawn into here. In the assessment used to estimate our fiscal deficit, and I accept it is an estimate, our net fiscal balance report, which is produced annually, is done on the basis of the same methodology as that used by Government Expenditure and Revenue Scotland (GERS). What is happening in Scotland is significant. If we were to take on all the powers, including fiscal devolution, being devolved to the Scottish Parliament after the Smith commission, the Northern Ireland Assembly would be accountable for 41·5% of its income. That excludes corporation tax, which would probably take that figure closer to, if not over, 50%. Our economy has not developed in the same way that Scotland's has.”
“I want to see Northern Ireland pay more of its own way, but we all have to be realistic that, in the short term, this is not a deficit that can be easily eradicated, no matter what measures or levers we pull.”
“That is why we have pursued and secured the devolution of air passenger duty for long-haul flights, and why we have within our grasp the devolution of corporation tax and the ability to reduce the rate of corporation tax in Northern Ireland. <BR /> <BR />Therefore, I think that I and my party have shown that there is a willingness to entertain, take forward and execute further fiscal devolution where it is right for the people of Northern Ireland. However, as we continue to examine other potential powers, we need to bear in mind the particular fact about affordability, and the fact that there is a near £10 billion fiscal deficit in Northern Ireland between what we raise and what we spend on an annual basis. I want to see that gap closed down, and it will take a long time to do it.”
“However, when Ms Boyle said that austerity is the price of economic governance from Westminster, it begs the question whether economic governance from Dublin would be any better. I seem to recall over the last number of years a much more severe package of austerity measures being implemented by the Dublin Government because of the difficulties they are in. <BR /> <BR />Members opposite continue to bang the drum for more fiscal devolution for Northern Ireland. Let me put on the record again, if it needs to be put on the record again, the fact that I am not opposed to more fiscal devolution. However, it has to be measured against the yardstick of whether it is affordable for the Executive and whether it produces defined economic and/or social benefits for Northern Ireland and its people.”
“I think that there would be a lot of agreement on both sides of the House that our spending power as an Executive has been severely diminished as a result of proactive measures and steps taken by the current Conservative-led coalition Government in Westminster, to the extent that about 1·5% of our spending power, in real terms, has disappeared over the last four to five years, which is a considerable chunk to take out of our ability to spend as an Executive. <BR /> <BR />As Mr Hazzard pointed out, the Barnett formula and the various funding mechanisms do not take account of the fact that Northern Ireland has a particular set of circumstances, whether it is because we are coming out of the Troubles or the divisions in our society as a result of that.”
“This is one of the reasons why I proposed the establishment of an investment fund for Northern Ireland, which could take on considerable quantities of FTC not just in the next financial year but potentially in future years as well and allow that to lever in finance from elsewhere and outside Northern Ireland to invest in a range of different capital projects. <BR /> <BR />Mr McKay, in a party capacity, highlighted the fact that this is not a Sinn Féin Budget. I am glad that that is the case. I shudder to think of what one might actually look like. He talked about fiscal powers, revenue raising and tax devolution, as did his colleagues Michaela Boyle and Chris Hazzard. <BR /> <BR />During her comments, Michaela Boyle said that austerity is the price of economic governance from Westminster.”
“I am glad to hear that the Chair welcomed that, or at least raised that point, because it underpins and underlines the need to have the change fund and allocations from it. He mentioned financial transactions capital, as did Mr Cree, and the need, to paraphrase, for a focus on how we can spend that particular type of capital money moving forward. As the Member and the House are well aware, we have had difficulty spending all of our FTC allocation in this financial year. Departments have come forward with a lot of schemes, but those have been very small in value and have not soaked up all the money that we have in FTC.”
“Those have had to be re-evaluated critically by Departments, with the resources used elsewhere or in a different way. <BR /> <BR />The Chair also mentioned the need to focus more on preventative spending. Things such as preventative spending are perhaps seen as a bit of a luxury in the sort of Budget climate that we have in 2015-16 and beyond. As an Executive, we should continue to focus as much of our available resources as possible on it. That is why we developed a change fund of £30 million and set it aside in the draft Budget to be allocated in the final Budget. One of the criteria for that expenditure is that it should be spent on preventative measures and early interventions.”
“Officials in my Department have continued to hollow that out with Treasury over the past number of weeks and months, and we will hopefully come to a firm position on what the liability will be for the various pension schemes in time for the final Budget. <BR /> <BR />The Chair also raised issues of revenue-raising and tax devolution. I will set those to one side just for a moment. <BR /> <BR />He was right to make the general criticism that many Committee Chairs and Members would make, and, in dealing with the difficulties that they face, we do not want Departments to salami-slice departmental budgets. Rather, we want them to become more strategic. I have said it before in the House that we continue to deliver many things through public services in Northern Ireland that have perhaps never achieved their objectives.”
“As some other Members mentioned, those issues are exacerbated by the fact that this is a one-year Budget, which makes it difficult to achieve everything that we want and need to achieve in the medium to long term. However, as Mr Weir said, the 2015-16 Budget has to be the start of the reform and restructuring of our public sector that will get us on to an even keel as we move forward. <BR /> <BR />Like other Members, Mr McKay raised a specific issue about pensions and the £130-odd million that has been set aside for pension revaluation. I appreciate that there is not perhaps as much transparency on that issue as Members would like.”
“Finally, consultation with the public, stakeholder groups and the Assembly, including today’s debate, will help to shape the final Budget and the proposals that will be taken to the Executive, hopefully in the next number of days, and ultimately voted on by the House. <BR /> <BR />I now want to deal with issues that Members raised. The debate was so long and my time is so limited that I am certain that I will not get to them all. However, I will do my best to progress through most of the comments made by Members. <BR /> <BR />I begin by thanking the Chair, Mr McKay, for his contribution and for stewarding the Committee over the past number of weeks and months in the production of its work. He is right to identify that this is a tough year and that that there are tougher times ahead.”
“Furthermore, the Chancellor’s autumn statement provided the Executive with an additional £67 million of resource DEL and £7·1 million of capital DEL, of which £1·3 million relates to FTC funding. Those funds will be disbursed in the final Budget after other issues, such as the £114 million welfare penalty, are accounted for. <BR /> <BR />The ministerial bilaterals that I have conducted with other colleagues have proved a useful exercise for discussing Ministers' key issues and priorities and for seeking their views on funding and wider budgetary issues. Those discussions will help the Executive to refine their Budget priorities for 2015-16.”
“The Stormont House Agreement has allowed an increase in that funding, and that will allow the scheme to cover adequately the wider public sector. Of course, reform of the public sector requires more than a voluntary exit scheme, and I have circulated a paper to the Executive to seek their support for a range of measures. <BR /> <BR />It was inevitable that requirements for the 2015-16 Budget will have changed since the publication of the draft Budget. We can see that, for example, with the developments in the Casement Park planning application, and I expect that the Executive will have some additional funding to allocate as a result of changes to budget assumptions, centrally and in individual Departments.”
“Potential changes to the draft Budget position will be influenced by a number of considerations. As Members will be well aware — indeed, many mentioned it — the Stormont House Agreement provides the Executive with a financial package of measures that will help place the public sector here on a sustainable footing for future years. The Executive parties have also, significantly, agreed a way forward on welfare reform. Although the agreement assists the Executive in addressing the pressures that they face, it does not mean that difficult decisions can be avoided. Rather, it is a deal that provides the building blocks for the reform and restructuring of our public services. To facilitate that public-sector restructuring and reform, the Executive set aside £100 million in the draft Budget to fund a voluntary exit scheme.”
“That prioritisation is why there is a wide variation in the departmental adjustments, ranging from an increase of 5·3% in the DETI budget to a reduction of 11·1% in DOE's.”
“Obviously, a key element of that prioritisation was the provision of an additional £200 million to alleviate pressures on the health service.”
“The starting position for allocating resources had to factor in a 1·6% real-terms reduction in funding from Her Majesty's Treasury. Added to that, there was a need to address a wide range of other commitments, such as repayment of the £100 million reserve claim in 2014-15; a number of unfunded Executive commitments, including the historical institutional abuse inquiry, local government reform, housing benefit rates rebate, Executive funds, etc; and a significant increase in pension scheme costs. <BR /> <BR />To cover those pressures and to provide the Executive with scope to prioritise funding to Departments, the Executive imposed a 15% baseline reduction on all Departments, excluding most of health. That realised funding of £872 million to cover central pressures and to provide funding for priority areas in Departments.”
“I believe that addressing those fundamental issues will require the Executive to consider significant changes in the way things are done. I will say more about that shortly, but I first want to briefly explain how we constructed this draft Budget position. <BR /> <BR />The capital DEL side was relatively straightforward in that funding was allocated to the highest-priority projects after contractual and Executive commitments had been covered. Of course, it is now up to individual Ministers to determine what projects they fund within their Department's funding envelope. The overall outcome will see almost £1·2 billion allocated to projects in 2015-16. <BR /> <BR />The resource DEL position in 2015-16 is considerably more restrained.”
“However, before I do that, I would like to make some comments on the strategic context underlying the development of the Executive's draft Budget proposals. <BR /> <BR />Members will be well aware of the financial environment confronting us in 2015-16 and, perhaps more importantly, the years thereafter. We are not simply facing a one-year budgetary problem. In developing a draft Budget, the Executive have had to grapple with a wide range of concerns, particularly on the resource departmental expenditure limit (DEL) side. Those can only be addressed by taking very difficult decisions. In order to manage the pressures that we face, we must address fundamental questions about how we deliver public services in Northern Ireland and, indeed, what public services we should continue to deliver.”
“I am tempted to begin by saying that Mr McCallister made a better contribution in two minutes than most Members did in seven. Maybe there is a lesson for the Business Committee in future allocations of time. <BR /> <BR />Mr Speaker, I congratulate you on your appointment to the post of Speaker. <BR /> <BR />I welcome the opportunity to participate in today's debate on the Executive's proposals in respect of the 2015-16 draft Budget. I would like to express my appreciation to the Committee for Finance and Personnel for its efforts in drawing the main issues together in this important process. I am also grateful for the comments made by Members today on the Executive's proposals, and I will attempt to respond to as many of the points raised as possible.”
“The paper outlines the hope that, with a lot of effort and work over the coming weeks and months, we could have a voluntary exit scheme in place open for applications early in the next financial year. We will then start to take the first tranche of people out of the public sector around August or September next year.”
“The Member is right. I do not think that any Minister who has reported to their Committee on the impact of the reductions in their budget has not said that they expect to take a number of staff off the payroll. The feedback that I am getting in discussions with Ministers so far is that every one of them has wanted to discuss the issue and has wanted to understand when a scheme will come forward. They are not hugely relying on making savings next year, but they want to know that they can start to make savings next year, which will materialise in much larger quantities the year after. <BR /> <BR />I have submitted a broader paper to the Executive on restructuring and reforming the public sector; it includes a range of issues, but primarily the voluntary exit scheme.”
“I also think that we have a Government in London who are receptive to our argument, and I hope that they follow through positively with a decision tomorrow that is beneficial to Northern Ireland.”
“Work will be ongoing with officials. Even if there is a positive decision tomorrow, it will not be a positive decision with a precise price and all the technical details. Some work will still have to be carried out with regard to all of that, and that will, obviously, have to be done incredibly quickly over a short time. <BR /> <BR />Like the Member, I hope that we get a positive decision tomorrow that will allow Northern Ireland to move forward on this issue, after the struggle and battle that there has been for the best part of a decade to get to this point. We have done everything that we can. I think that we have made a very strong, robust and sound case, based on evidence and need.”
“The economic pact was very clear about a final decision being made no later than the autumn statement. I expect a statement tomorrow. I do not know what nature and shape that decision will take, or what it will or will not say, but we expect a decision of some kind tomorrow. <BR /> <BR />If it is, as we hope, a positive decision, in many respects, after a decade of work to get to this point, the work to ensure that the legislation can get through Westminster will really start. Obviously, we will be looking to the Member and his colleagues to ensure the swift passage of that legislation across the Houses of Parliament. We have work to do in Northern Ireland too with regard to consenting to that legislation, and, later, passing our own legislation and deciding where we want to set our level of corporation tax.”
“A positive or supportive decision by the Chancellor will necessitate work being done at Westminster, by way of the passing of legislation there, and in Northern Ireland, by passing legislation here. I am still hopeful that we will get the go-ahead tomorrow that will allow us to proceed with securing that policy.”
“I am at pains to stress that Northern Ireland is in a unique position. We are not Scotland, in terms of our economy and our economic development. Scotland's economy is much stronger and more industrialised than ours. <BR /> <BR />As the Member and the House will know, we have suffered for a number of years from underinvestment because of the Troubles, and we have that challenging land border issue with a state that has a considerably lower corporation tax rate. The fact that there is nothing in the Smith commission report about corporation tax does not necessarily mean that there is going to be a bad answer for Northern Ireland. I hope that we get a positive outcome by way of, at least, some sort of decision by the Chancellor. Obviously, a lot of work will be required to be done after a decision is made.”
“There are, perhaps, no direct consequences flowing from the Smith commission report. It was a discrete piece of work that was done for Scotland, viewed from a Scotland perspective and populated by Scottish politicians, and, obviously, Scottish politics were very much to the forefront of the minds of members of the commission and the conclusions that they reached. <BR /> <BR />Some have suggested that, because there was a rebuffing of corporation tax for Scotland and then the subsequent comments of the First Minister in Scotland that she was disappointed. To be fair to her, she has been supportive of our call for the devolution of corporation tax to Northern Ireland. Some have also suggested that the rebuffing of the Scottish demand for corporation tax might have thrown some sort of a spanner in the works. I do not see it that way.”
“We will then decide where the people will come from and when they will come out of those Departments or arm's-length bodies. It is very complex, technical, difficult and challenging work, but, at all stages, we have to bear in mind that we are talking about people and we need to be sensitive to their concerns.”
“Many people and families across Northern Ireland, for whatever reason and whatever their particular motivation or concern, will want to know with some certainty what is happening, when it is happening and what it means for them. <BR /> <BR />Whilst it would be wrong to say that something like that will not happen and that we will not have to have a voluntary exit scheme — we clearly will have to have such a scheme — it would be equally wrong to rush out and say that there will be x number of people in this, that or the other Department. A lot of work has to be carried out before we can hollow out exactly how much money we have, what it will cost to remove people and whether we will have to do that over one, two, three or maybe more years.”
“As the Member was talking, I wrote down one word: "voluntary". It is important to stress that we are developing a voluntary exit scheme. <BR /> <BR />I do not want to jump to rash conclusions, but the feedback that I am receiving is that a voluntary exit scheme will not be rebuffed by many in the public sector. A number of people would like to avail themselves of such a scheme, and we will see the quantities as we develop a scheme over the next number of months. <BR /> <BR />I am aware that it is one thing, and it is my responsibility, to stand here and say that we have a Budget, that we must live within our means and that, particularly in the current circumstances, that requires drastic action. However, I also have to be sensitive to the fact that we are talking about people, and the Member was right to make that point.”
“No matter who is stewarding those Departments in a ministerial sense, there are no Departments that see it as anything other than necessary to help us to live within our means.”
“Down through the years, certainly since I have been here and before that, there has been consensus across the House that we have an over-reliance on the public sector in Northern Ireland for economic growth and employment. We have a rather large public sector of around 212,000 people for a population of just 1·8 million. Whilst we want to rebalance the public sector, the circumstances that we find ourselves in that are forcing us towards rebalancing it are not ideal. <BR /> <BR />It is too early to say precisely how many people we expect to lose across the public sector. In the discussions that I have had so far with every Minister from every party represented on the Executive, I found that there are no Departments, arm's-length bodies or public sector bodies that do not foresee the need to reduce their headcounts by some degree.”
“The deputy First Minister and I pointed that out to the First Minister, and she was keen for that to continue, because, looking four or five years down the line, if the Scots do develop their own welfare system and that is a system that is more in keeping with where we might want to be at that time having passed some welfare reform legislation in the intervening period, there may be an opportunity for us to work with the Scots and have a joint welfare system, which would help to reduce many administration costs. <BR /> <BR />However, I am at pains to stress that that very much depends on what the Scots decide and will be very much in the longer term. I do not see it happening in the next year to 18 months or before we have to make a decision on the issue.”
“All of these flexibilities come at a cost to the Northern Ireland Executive. <BR /> <BR />I think that there is potential for us to work closely with Scotland. They will tease out and work out themselves whether it is in their interests, whether they want to take it, how they want to take it, what they want to take, what they do not want to take and what the ramifications are for developing an IT system for Scotland. As they form a view on all of that, it is important that we keep close to them and continue to engage with them.”
“The area of welfare contained in the Smith commission report is one of the more complex ones. I met the new Scottish First Minister, Nicola Sturgeon, last week at the British-Irish Council. She was at pains to point out that the Smith commission, in her view, was a good start but did not go far enough as far Scotland was concerned. <BR /> <BR />In respect of welfare, I do not wish to ascribe views to her, but I think that she was a little underwhelmed that the welfare benefits that were potentially going to be devolved to Scotland were only a small chunk of the overall welfare benefits and that any decisions that came at a cost would have to be paid for by the Scottish Government. This, of course, sounds familiar to us here because, obviously, we have negotiated flexibilities around welfare reform.”
“I think that it was an interesting report that was published last week by the Smith commission. I have taken a look at it, and, obviously, I will study it in much more depth. It is interesting in itself because of the impact that it has on Scotland, but it is more revealing perhaps, particularly with the conversation that we are having at the minute in respect of the devolution of further powers to Northern Ireland. Obviously, we are very much focused on the devolution of corporation tax, and, hopefully, we will get a positive response to that in the next 24 hours. It reveals that, particularly around welfare and other tax devolution, there is potential in Northern Ireland, should we want it and should we judge it to be in our interests, for more powers to be granted to the Assembly should we agree to seek them.”
“It would not matter to me whether they were special advisers or, indeed, any other civil servant or public servant. When they come before Committees of this House, they should be treated with courtesy and respect. First, they should not be treated as if they are guilty, which is the behaviour of the Member Mr Allister in his dealings with Mr Brimstone. Secondly, they should not be treated as if they are some sort of witness in a court of law where the Member can practise the skills that he has developed through the years in the High Courts in Belfast. All witnesses and all people who come to the House to give evidence in whatever way, shape or form should be treated with decency and respect.”
“I think that what I have done in not asking for the report, not looking at the report, not seeing the report, not commissioning it and not being involved in it in any way, shape or form was the right and proper thing for me to do.”
“That is a typical response from the Member, who has shown his position on this issue through his very open remarks in the Committee. I would have thought that, as a lawyer, he would have waited until the balance of evidence was there, but he has very clearly reached a conclusion in his own mind on the matter. <BR /> <BR />This was a fact-finding investigation, commissioned by the permanent secretary responsible for the Department for Social Development: it was nothing to do with me, and it was nothing to do with my Department. I daresay that, had I shown an interest in the report and asked to see it, the very same Member would have been accusing me of interfering in the process.”
“The Member has articulated the position exceptionally well, to the point where I am wondering why he needed to ask the question. The head of corporate HR in my Department — corporate HR has a range of responsibilities, not just in my Department, but for the broad Civil Service — was asked by the permanent secretary responsible for the Department for Social Development to carry out a fact-finding mission. I presume that that was done on the basis of getting an independent view or voice from outside the Department. That work was carried out, but it had nothing to do with me, and I did not commission it. Therefore, it is not a responsibility for my Department.”
“DFP had no departmental role in the fact-finding investigation into the actions of Mr Stephen Brimstone.”
“Obviously, towards the end of an Assembly term there is a rush to get legislation through and there is pressure on resources in terms of the legislative draftsmen, the time available in this House and the time that the Committees have available. Certainly, if there is a need to do it, that is something that I certainly will pursue.”
“I was concerned, and this is why I am glad to have the opportunity to clear some of this up, that the Commission's expiring at the end of this year might have kiboshed the whole review and shunted it into the sidelines; it might have made it difficult for us to pick up and continue in a way that included the all-important independence that I wanted to have in that review. <BR /> <BR />I would be foolhardy if I stood here and guaranteed anything, including legislation, on this. However, the whole purpose of the review is to get an independent perspective and for us to consider that and see where the balance of the arguments are on the need to introduce legislation. If the conclusion that I reach after studying the report is that there is a need for legislation, I will seek to bring that forward.”
“<BR /> <BR />While not wishing to speak for the Minister of Justice, I am sure that he would highlight the fact that, in the very pressurised budgetary environment that he is facing, not just this year but in future years, he has to take decisions that, in a more perfect environment or a more benign environment, may not be decisions that he would want to take, but that in order to ensure that as much of the front-line services, particularly around the police, are protected and supported within his area of responsibility, the decision to do away with the Law Commission is, in that context, a reasonable one to make.”
“There is a pattern developing: a lawyer asked the first question and another lawyer asked the second. I would expect a lawyer to point out where I was wrong in respect of this. <BR /> <BR />The decision on the Law Commission is not a matter for me; it is a matter for the Minister of Justice. The point that my learned friend made so eloquently would be better directed towards the Minister of Justice, who obviously faces, not just this year but in future years, pressures on his budget. I am sure he can argue with the Minister of Justice about the relative merits of the Law Commission.”
“Rather, it is envisaged that the commission's lead lawyer, who has been carrying out the work on our behalf, will complete the final report and refer it back to the Department for consideration.”
“My whole objective in asking the Law Commission to carry out a review of the law of defamation in Northern Ireland to determine whether there is a need to extend to here in full or in part the changes that were made to the law of defamation in England and Wales was that we needed an independent perspective on it. We had views expressed by some in the legal profession, who may be considered to have a vested interest, and by some in the press and media, who may also be accused of having a vested interest. I thought it important to get an independent view. <BR /> <BR />In short, the contingency arrangements that I am talking about are designed to advance rather than diminish the level of independence. My Department will not be assuming any responsibility for the final stages of the review project.”
“I thank the Member for his question. I thank him for his original question, too, which gives an opportunity to clear up for the House some confusion that may have emanated from the Minister of Justice's decision to end the work of — close down, effectively — the Law Commission from the end of this financial year. There was concern in some print media that that would lead to the end of the review, which I commissioned about a year ago, and that we would not see any progress on the matter. I had correspondence with the Minister of Justice, and we have agreed the consultation, which was published just this past week. That will take some time to complete and get the feedback on. <BR /> <BR />The Member asked about independence.”