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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“I believe that the Education Department, like other Departments, should be making its contribution to the reductions that we all have to face in a very difficult and challenging financial year.”
“If, when we started our work on the draft Budget, we had wanted to offer considerable protection to the Department of Health, which, I think, everybody in the House wanted to do, and offered the same degree of protection to the Department of Education, there would have been 22% reductions to all other Departments. When we hear the concern, pain and anguish that is expressed about cuts of in and around 10%, we will, I think, agree that 20% cuts would have been unmanageable and intolerable for all Departments. <BR /> <BR />My party and I still value education. It is a bedrock of society; it is the first staging post in developing a vibrant and dynamic economy. That said, in the first instance, we cannot say that no efficiencies can be made in the system.”
“I thank the Member for her question. There had not been blanket protection for the Department of Education in the 2011-15 Budget, but protection had been afforded to that Department in-year by way of the 4·4% reductions that were made in the June and October monitoring rounds. Following on from my predecessor, I have been consistent in saying that the Department of Education should not be afforded blanket protection and that there was scope for efficiencies within its system, as there is in any other Department. It was never a matter of me locking horns with the Minister; it was not a DUP v Sinn Féin point.”
“When we are facing reductions in our spending power of £1·5 billion, and when we have hundreds of millions of pounds less, this year, to spend on public services to try to bring in jobs, encourage growth in our economy or deliver first-rate services across Northern Ireland, we must remember that it is those cuts that have been delivered by the Conservative-led Administration in London, which the Member would have been trooping through the Lobbies to vote for, as he would have done for other policies, such as welfare reform, that have brought us here. It is the Member and his party who, more than anyone else, are guilty of causing the problems in public spending in Northern Ireland that we find ourselves in today.”
“The Member does not want to hear this, of course; he does not want to be reminded, because there are fingerprints all over the document, and the fingerprints are his. The manifesto, which, of course, is Mr Nesbitt's manifesto, talks about immediate action to cut £6 billion from Departments' expenditure and further savings in future years. Of course, had the people of Strangford not seen sense and had not voted for Jim Shannon and returned him as their Member of Parliament in 2010, these would have been the cuts that the Member would have been voting for in Westminster. When the First Minister warned people in Northern Ireland that that was what a vote for the Ulster Unionist Party meant in the 2010 election, he was told that he was guilty of irresponsible scaremongering. <BR /> <BR />These are our cuts.”
“This document is the blueprint — the bluest of Tory blueprints — for reducing public expenditure in Northern Ireland, Scotland, Wales and the regions of the United Kingdom. The document talks about —”
“I certainly had no meeting with the president of Sinn Féin. He may well have been busy last week with a few well-publicised issues. I suggest that the Member is probably referring also to other politicians outside Northern Ireland, including, perhaps, the Chancellor of the Exchequer. I listened to Mr Nesbitt's comments to the media at the tail end of last week. He reminded me, of course, that George Osborne was his candidate for Chancellor in the 2010 general election. I went through my extensive archives at home and found this document, which Mr Nesbitt will, I am sure, remember: 'Invitation to Join the Government of the United Kingdom'. It is a joint manifesto by the Conservative Party and the Ulster Unionist Party. I do not think that too many people took you up on your invitation.”
“The First Minister has reminded me of the investment in the private sector, with jobs coming to Fujitsu. I remember meeting the global president of Fujitsu last year, who talked very highly of the skills of the people of Londonderry who were working for his company. He brought another investment into the area as a result of that. There was the £35 million investment by Seagate in research and development, creating 35 high-paid and high-skilled jobs in that city. There is a record of investment in the north-west — in public services, infrastructure, jobs and culture — that the Member should welcome instead of criticising. If there were that sort of investment in other parts of Northern Ireland, there would be a lot of happy Members in the Assembly.”
“<BR /> <BR />Obviously, it is a matter for individual Ministers where they invest the money in their new baseline for the next financial year, but the Executive have a record of taking Londonderry and the north-west seriously, putting our money where our mouth is and investing in that part of Northern Ireland. The people there are starting to see the benefits of that, with the spin-offs from the City of Culture. The Member shakes his head, but I reiterate the point that he does the people of Londonderry a disservice by talking his city down all the time in the House and in the media. Investments have been made in Londonderry and the north-west of Northern Ireland that constituencies all over Northern Ireland would very much welcome.”
“I have said to the Member before in the House that, instead of talking down his city, he would better serve the people of Londonderry if he were to come to the House or go on radio and television and start talking up what is a wonderful city, a wonderful region and a wonderful part of Northern Ireland. The Executive have invested significantly in the north-west. Everybody on all sides of the House welcomed the City of Culture and appreciated the benefits that it brought to Londonderry. We can all be proud of the North West Regional Science Park, recently opened by the deputy First Minister and developed using and leveraging in EU funding. There are also the developments, through Ilex, of the Ebrington site and of Fort George. All sides of the House should be proud of the investment that we have made in our second city.”
“In a situation in which we have £213 million less to spend this year than we had last year, we have tried to make sure that the money goes where the people of Northern Ireland would wish us to put it. I think that, if we were to walk out of Stormont and ask people walking up the Newtownards Road where they wanted us to spend our money, they would say that they wanted us to prioritise health and try to ensure some protection for education and policing. They would also want us to continue to invest in job creation so that the unemployment numbers, which are, thankfully, falling, continue to fall and people right across the Province can get back into work and start providing for their families.”
“Independent economic forecasters such as the Northern Ireland Centre for Economic Policy project that there will be further growth in the economy this year and next year. That is backed up by survey evidence from the likes of the Ulster Bank's purchasing managers' index, which show growth in the economy and confidence coming back into our firms across the country. <BR /> <BR />I understand the Member's point about trying to ensure that the recovery is felt by everybody. However, it is incredibly challenging, even in a small region like ours, to ensure that every area or every person feels the same degree of recovery. That is why we have tried to concentrate the allocations that we have made.”
“The first thing that we should all welcome is that the economy is clearly starting to recover. I accept that that is not uniform and that areas of our economy, such as retail and the construction sector, are still having difficulties. However, the good news is that, across the board and in the overall picture, the economy is starting to move in the right direction. We see that with the growth in the economy in the last year of over 1%, in the unemployment claimant count falling for 21 consecutive months and in an unemployment rate of 6·1%, which is almost half that in the Irish Republic, for example. We also see employment rising and economic inactivity falling. Every indicator that has been moving in the wrong direction over the previous five years is now starting to move in the right direction.”
“Thus, on top of the £1 billion that we invest annually as an Administration, that will be £1 billion that can be invested in projects such as social and affordable housing, renewable energy, energy efficiency, energy production and, potentially, telecommunications and urban regeneration. I am sure that everybody will welcome a further fillip of £1 billion for our infrastructure investment.”
“I am sure that my disappointment about the accounting treatment of that money is nothing compared with the people in mid-Ulster who will, I am sure, be annoyed about the project not moving forward. <BR /> <BR />The investment fund should be welcomed by all sides of the House. It will encourage and be a catalyst for significant private sector investment in infrastructure across Northern Ireland. Again, whilst we do not have specific projects in mind, the European Investment Bank, which we anticipate will act as our fund manager, has told us that, if we deposit about £100 million of FTC in the fund, it will leverage in roughly £1 billion of investment from the EIB alone.”
“I will take the Member's second point about Desertcreat first. There is a line of roughly £53 million of funding to develop the Northern Ireland Community Safety College at Desertcreat in the Member's constituency. That was put in, and the Minister of Justice was well aware that that was put in, so I am a little disappointed at that, although probably not as disappointed as the Member and his constituents will be if the project does not go forward, as the indications are today. I am also disappointed that the project board met on, I think, 29 October, before the Budget was agreed, yet no communication was made to me or to any other Minister that the project was unlikely to proceed. We could have adjusted the Budget accordingly.”
“<BR /> <BR />The question about equality impact assessments is probably better directed to the Minister of Health himself. The draft Budget is predicated on some work being done on the strategic long-term view at the Department of Health and to ensure that the £200 million allocated in the draft Budget goes to front line services. The head of the Civil Service has been charged with undertaking that work. I know that the previous Health Minister was keen that the OECD review that I mentioned in my statement should focus on his Department. That may be able to provide some independent scrutiny of the Department, where it is spending its money and how improvements can be made in the long term.”
“At the end of the last financial year, when there was a small overspend in the Department of Health, and before the allocation of £80 million to it in this financial year, it was requested that, before the first tranche of that — the £20 million allocated in June monitoring — work be undertaken to ensure that the overspend did not happen this year or in future years. I am pleased with the work that has gone on. Significant improvements have been made in the management of health budgets, to the extent that I am confident that there will be no overspend this year. Obviously, the Minister has had to make difficult decisions over the past days about where those in-year savings will come from, and I know that there is much concern across the community about that.”
“It is about allocating money to reform-orientated projects that can, in one sense, develop savings but also improve public services. There are no specific schemes in mind at this stage. It has been left very much to Departments to work away over the draft Budget period, spending the next eight weeks working with counterparts in other Departments to develop schemes that might avail themselves of that funding. Those will then be put into the baseline of Departments at final Budget.”
“I thank the Member for his question. The change fund is a small amount of money — some £30 million — in the grand scheme of the Budget. I hope that it will be a catalyst for the reform that we clearly need in our public sector if we are not just to live within our means next year in a very constrained and challenging position but to prepare ourselves for at least another three years, if not four or five years, of austerity coming from London. <BR /> <BR />The fund is being held at the centre for distribution in the final Budget to Departments that come forward with innovative schemes that focus primarily on collaboration between Departments or between Departments and their agencies and on schemes that focus on early intervention and prevention.”
“Clearly, a lot of work has to be done in developing that economic plan on behalf of the Alliance Party.”
“It is important that, when we have the consultation period, I listen to Ministers and discuss options with them. I have to admit that, if money is available during the consultation process, I am keen that we direct it towards DEL in the final Budget process. That is something that most parties in the Executive agree on. It is one thing for me to have a sympathetic view about that but another for me to find the money during the Budget consultation period. I encourage Members and Ministers, when they come forward with the special pleading that they all inevitably will make, to offer ways in which we can find that money. The Member mentioned prioritising areas in which efficiencies could and should be made, without elaborating on what exactly that means. It is easy to throw things around without proving where money can come from.”
“I also got a further £3 million for what the Minister would describe as narrow STEM subjects, which are the IT courses in universities and further education colleges that are the pipeline that Invest NI uses to bring jobs into Northern Ireland.”
“It is unfortunate that, of all the areas that could be targeted, this is the area that the Alliance Party seems to be targeting. <BR /> <BR />The Member mentioned the settlement for the Department for Employment and Learning. It is fair to say that, in part because of the way in which the Minister for Employment and Learning constructed his bids, putting forward no legal, contractual or inescapable bid, it was difficult to prioritise allocations to his Department and to do so on the basis of any methodology. We worked with the Minister. I met him on two occasions last week, and, as a result of those discussions, a further £15 million was allocated to the Department. That was primarily to ensure that 16- to 18-year-olds in our colleges got the same protection as 16- to 18-year-olds in school get.”
“The Member has mentioned only one area that money could be moved from. I at least welcome that the Member is offering one area. There will be lots of people, I am sure, who will say in this debate that they want more money here or there but will not actually offer any reason. However, I do not think that the reason that the Member offered is a particularly good source for funding. The total amount allocated to the social investment fund would do little or nothing to improve the DEL figure and would actually only take away much-needed investment from communities that are disadvantaged and very much in need of investment across Northern Ireland. I see the Member to the Member's right scoffing at the social investment fund; perhaps he is scoffing at disadvantaged areas, the people who live therein and the help that they need.”
“That would be somewhere that was off the public sector balance sheet but could still invest in significant infrastructure projects. This is the vehicle that, I think, certainly in the next financial year and beyond, we will be able to deposit significant amounts of cash into and, in the process, give cheap money for infrastructure projects in social housing or renewable energy. That is certainly a possibility for next year, and I think that we can put large amounts in then. If we have advanced the feasibility study to a sufficient point in this financial year, it is possible that we may be able to use some of the unspent £35 million of FTC and deposit it with the European Investment Bank for the investment fund in advance of it starting to work next year.”
“This was an opportunity to bring that scheme forward, and, in the bilaterals that I will have with Ministers about the Budget, I intend to raise the issue with the Regional Development Minister to see whether we can actually use FTC to advance that project. <BR /> <BR />The Member is right about the current in-year position, where we have, at this stage, approximately £35 million unallocated in FTC. He is right that we can roll forward about £5 million of that. That still leaves a lot of money to be allocated, and I suppose this was the origin of the investment fund, which the Member mentioned and which was mentioned in my speech. It became clear to me some time ago that there was a need to find a vehicle into which we could put FTC.”
“It is the perfect scheme for using FTC, because, whilst it has a public sector origin — it is developing a rail and bus centre in the centre of Belfast — it has commercial opportunity and therefore has a revenue stream that allows the FTC to be repaid. Unfortunately, it appears that Translink has got its claws into the project and would rather have, as I suspect is the case with a lot of other Departments, conventional capital, because it is easier to deal with, they understand it much better and this is something new and they are not prepared to work with it. The reality, of course, of DRD not moving forward on the Belfast transport hub with FTC is that the likelihood of getting conventional capital for that project is diminished.”
“The Member has frequently raised FTC in the House, and he and I have had conversations in the Chamber before about it and about concerns that he and I have had about the Executive's ability to spend this new device. I think that the fact that it is new has caused teething problems for Departments, and I think that there is also an issue with the ambition of many Departments. I am disappointed, for example, by the Department for Regional Development, where I had discussions with the Minister about a year ago about trying to take forward the Belfast transport hub using financial transactions capital.”
“I am not hearing the Member saying that we should follow the Irish in regard to that policy.”
“<BR /> <BR />We are not actually proposing pay reductions, which the Member was, perhaps, inferring, although that, of course, was a policy that was pursued in the Irish Republic, of all places, where considerable reductions in pay for public servants were made over the past number of years to get that country through the difficult times that it faced. I know that the Member is a great advocate of Irish unity and of us mimicking and mirroring what is happening in the Irish Republic.”
“I thought it was clear in the statement that work is ongoing on an overall workforce restructuring plan, which will, of course, look at headcount reductions, recruitment freezes, temporary staff and pay restraint. Let us bear in mind that, in the last fortnight, I have approved the pay remit for the current financial year, which had a 1·5% increase. I want to make that clear again: it is a 1·5% increase for staff who were within their scales and a 1% non-consolidated increase for those at the top of their scales. The last bid by the public sector unions was for a 1·9% increase, so to come in at 1·5% in the difficult position we find ourselves in this year was a reasonable settlement in the circumstances.”
“In fact, our public spending power is down by £1·5 billion, which is a sizeable amount of money. <BR /> <BR />If we project that forward using the Office of Budget Responsibility's figures to the end of this decade, it is anticipated that a further 13% in real-terms reductions will come off our public spending power. That is a decade of austerity that we have the Administration in London to thank for. They have made a difficult decision even more difficult because of the constrained economic times that we are facing. Therefore, we have to deal with the hand that we have been dealt. It is not the hand that we would want to play and, therefore, it necessitates those difficult decisions and tough choices that this Budget epitomises.”
“I thank the Member for his question. There are some in the House who are probably better placed to talk about the impact that the reductions in spending and, particularly, the policy of austerity pursued in London, have had not just on Northern Ireland but on other devolved regions and regions of England. <BR /> <BR />We entered into this Budget facing a 1·6% real-terms reduction in our spending power, and that meant a small reduction in our block grant. So, instead of holding firm or going up slightly and keeping pace with inflation, our block grant has gone down. We started at the position where we had less money to spend. If we go back a little further to 2010, when the current Government in London came into power, our public spending in Northern Ireland has not kept pace with inflation in the way that we would have expected.”
“I am bringing forward proposals in respect of that, and I think there is a well- accepted acknowledgement by his party colleagues in the Executive that we are going to have to do something in that regard. <BR /> <BR />We should not lose sight of the fact that it is, I thought, the aim of every party in the House to rebalance our economy. Certainly, what we are seeing with the growth of our private sector and the movement of the public sector to a lesser role in economic growth is that rebalancing happening. That is something that we all should welcome.”
“That necessitates the tough choices and difficult decisions that I talked about. There are pressures, not just on Health but on every Department. There is less money, with £213 million being taken out of Departments' resource budgets. That will require reductions in service delivery, which is an unfortunate reality. <BR /> <BR />When you have £213 million less next year and will have more than that taken out in years to come, you do not need the same number of public servants to deliver those services. That is something that we are trying to move forward on, and that has been agreed by the Executive and certainly by the Member's party colleagues in the Executive. There will be a need to reduce the headcount right across not just the Civil Service but the whole of the public sector.”
“I am sure that the Health Minister would have liked more money to deal with the pressures that his budget is facing, but, in the constrained financial circumstances that we are in, the £200 million — that 1·7% real-terms increase — represents a good deal for health in very difficult and challenging circumstances. <BR /> <BR />The Member well knows, and, if he does not, he can talk to his party colleagues in the Executive, the extent of the difficulties that the Executive and Assembly face, not just in this upcoming financial year but moving forward as well.”
“I thank the Chairman — I think I thank him, anyway — for his question. Somewhere in his comments, he welcomed the additional £200 million allocation to the Department of Health, Social Services and Public Safety, which represents a 1·7% real-terms increase in funding, which is well above the rate of inflation. It is well documented, though, and I am sure that the Health Minister will concur with this, that there are 6% annual inflationary pressures on the Department of Health, Social Services and Public Safety. <BR /> <BR />We watch across the water as the NHS in England grapples with the £8 billion pressure that it has to deal with before the end of the year, and the same is true in Scotland and in the Republic of Ireland, where health requires much more than any Administration are able to give it.”
“<BR /> <BR />Facing up to reality, being prepared to compromise for the greater good and protecting and prioritising what really matters to the people of Northern Ireland are the principles that have informed this draft Budget, and I commend it to the House.”
“At a time of reductions in public expenditure, that is no easy task for any Government. In a five-party coalition, the level of difficulty is multiplied. It is an acid test for any Administration, and last week the Executive passed that test. It is probably not a draft Budget that any party alone would have set, but it is a product of negotiation and of compromise with decisions taken for the greater good. <BR /> <BR />Last week, the Executive faced up to tough choices and made difficult decisions. In short, we did what we were elected to do. The Executive have agreed a draft Budget, and now, through the consultation process, the public can have its say too. I hope that this draft Budget will mark the Executive turning a corner: a new start after some difficult times.”
“This draft Budget offers the best way through what was always going to be a difficult year and starts to prepare us for the tough times ahead. It deals with our difficult circumstances in a way that is right for Northern Ireland’s economy, for our public services, for our infrastructure and, most importantly, for our people. <BR /> <BR />This is not a draft Budget that is narrow, partisan or party political: it is about dealing competently and compassionately with the circumstances that we are in. We have faced tough choices, and, by backing health, education, jobs and investment in infrastructure, we have made the right ones and chosen the best interests of the people of Northern Ireland. <BR /> <BR />The first duty of an Administration is to set a Budget.”
“<BR />We have produced a balanced Budget with no overcommitment. We are building on the economic recovery by funding job creation, investing in infrastructure and creating a £1 billion investment fund. We have focused on reform and restructuring our public sector in readiness for the undoubted challenges that the years ahead will bring, and we have backed the public services that our people want to see prioritised, with a significant increase for Health and support for Education and policing.”
“— and what they would have done when the £100 million loan disappeared. <BR /> <BR />This draft Budget has been constructed in the most challenging financial circumstances to face any Administration in the history of Northern Ireland. However, despite the multitude of challenges the Executive face, we have agreed a draft Budget that prioritises what is important to the people of Northern Ireland. <BR /> <BR />When I began working on this draft Budget, I was deeply concerned that the scale of the pressures facing the Executive were so severe that the adjustments to public spending would be devastating. Cuts of 15% were on the cards for the vast majority of Departments. Instead, we have worked hard to stave off the worst, find imaginative ways to deal with our financial difficulties and still make significant allocations to priority areas.”
“Those who failed to support this draft Budget must explain not just why but what their credible alternative is —”
“We must play the hand as it has been dealt. That means difficult decisions and tough choices. <BR /> <BR />Given the inevitable impact of Budget adjustments of this scale, perhaps the easy option was to oppose this draft Budget. That would have been the irresponsible choice. Rejection of the draft Budget last week would have plunged us into an immediate crisis. Not only would Northern Ireland have been without a Budget for next year, and all the problems that that would entail, but we would have lost access to the £100 million loan facility that helped us with our in-year budgetary problems. Opposition or abstention might seem like an easy option, especially when you know that there are others who have the courage to do the heavy lifting that you are not prepared to do.”
“I do not underestimate the burden, complexity or indeed agony of the challenges we face next year and into the future. However, in this draft Budget, we begin to show that we are able to take the tough choices; not evading, and not abdicating our responsibilities. In the sort of situation we face, where the money we have at our disposal is falling, where the pressure on key public services like health rises year on year, and where costs like public sector pensions revaluation are considerable, it is impossible to construct a draft Budget where everyone is a winner. <BR /> <BR />I am sure that every Finance Minister everywhere would always prefer to be announcing a Budget where they were able to spread largesse around every Department with no one losing out. Unfortunately, that is not the hand I have to play.”
“That flexibility, alongside the reclassification of funding to cover the repayment of the reserve claim, will be vital in allowing the Executive to manage the difficult public expenditure environment that lies ahead. <BR /> <BR />In his 1962 State of the Union address, President John F Kennedy said:”
“This will embrace all possible personnel interventions, including a recruitment freeze, suppressing vacancies, the use of temporary staff, pay restraint and a voluntary exit mechanism, to reduce workforce numbers. I will bring a paper to the Executive within the next fortnight that will detail plans for addressing these issues. Elements of the restructuring, such as any voluntary exit scheme, will require setting aside upfront funding. Funding of the scheme will be vital to ensure we can deliver the restructuring our public sector requires to enable it to live within the ever more constrained resource DEL position. <BR /> <BR />I have begun negotiations with Her Majesty's Treasury to approve the use of £100 million of RRI borrowing to capitalise the cost of the workforce restructuring.”
“The fund is tailored specifically towards reform-orientated projects that are innovative, involve collaboration between Departments and agencies, or focus on prevention. Departments have been asked to submit bids to my Department, and those that are successful will be outlined in the final Budget. <BR /> <BR />While we would all prefer to be initiating reforms that are purely about improving public services, the starkness of our situation dictates that urgent action is needed to place our Budget on a long-term sustainable foundation. To that end, officials in my Department have, with the agreement of the Executive, been developing a workforce restructuring plan.”
“This groundbreaking work will assist the Northern Ireland Executive in identifying significant reform opportunities that will enhance public service delivery in the years ahead. <BR /> <BR />Members will also be aware of some of the reform architecture that I have put in place. Initiatives like the public sector innovation laboratory and our open-data challenge have followed on from our existing successful reforms such as our world-class shared services, digital transformation programme and asset management strategy. This draft Budget builds on that good start. <BR /> <BR />Making reform a reality can often require upfront investment that will garner long-term benefits. With that in mind, the Executive have agreed to allocate £30 million to a change fund.”