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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“<BR /> <BR />I continue, frequently, to encourage Ministers to open their mind to the possibilities that FTC creates for bringing forward capital projects that might otherwise not be funded from within their budget. I understand that it is different, it is new and it requires Departments to work proactively with the private sector, which is not necessarily what they are used to doing in the delivery of a project. However, this is the way that an increasing chunk of our capital budget is coming. I think that it will be an increasingly active feature of capital budgets moving forward. As that is the case and as we are looking at FTC comprising around 10% of our overall capital budget next year, Departments will have to think up new ways in which that money can be spent.”
“I am concerned to an extent that, if we have roughly £70 million of FTC this year — we are allowed to carry forward either 5% or 10%, which works out at roughly £5 million — we should be able to underspend this year, not lose it in subsequent years, and roll it into the next financial year. Whatever way you cut it, there is still a sizeable amount of financial transactions capital that is unallocated, and we are nearly halfway through the financial year. Officials in my Department are actively working with officials in other Departments to get them to come up with schemes that could use that money in-year. That work is proving to have mixed results. Some Departments are very active in coming forward with schemes; others have yet to come forward with any.”
“So, a range of projects across different Departments are soaking up that £38 million so far.”
“The Executive have allocated over £38 million of their allocation for financial transactions capital this year. We have a total of between the high 60 millions of pounds and £70 million, given the roll-forward of cash from last year that we were able to take into this year. So, we had around £70 million of financial transactions capital to spend in this year, and we have allocated £38 million of that. <BR /> <BR />The projects that are receiving that capital are the agrifood loan scheme, the Northern Ireland Science Park, GP and dental practices for some modernisation work that they are carrying out, a range of housing schemes within the Department for Social Development and, of course, the University of Ulster's relocation project to the Member's constituency of North Belfast.”
“If we have a situation in which retail is still suffering and there are still vacant units in our town centres and high streets across Northern Ireland, I will want to seriously look at extending that scheme beyond its life, as it is due to run out at the end of this financial year.”
“— which reopened last year using that scheme. I hear a welcome for that from the Back Benches. As Mr Frew will testify, that has breathed a bit of life back into that part of Ballycastle and has helped to rejuvenate the tourism product in that beautiful part of Northern Ireland. <BR /> <BR />I was able to visit a couple of the recipients of empty premises relief in my own constituency last week. Whilst the policy was about filling vacant spaces in high streets and town centres across Northern Ireland, the two businesses that I visited have, between them, taken on a total of five employees. So, those are new businesses that are filling units that were otherwise vacant, but they are also employing people in businesses and new businesses across Northern Ireland. <BR /> <BR />It is a policy that is working.”
“Some 331 businesses across Northern Ireland have opened as a result of the scheme. It has not just been small businesses. There was maybe a view at the start that the scheme would very much focus on retail, but it has not just been retail businesses, such as corner shops or other small retail units, that have benefited. Cafes, restaurants and a range of different businesses have benefited. One of the biggest beneficiaries was the Marine Hotel in Ballycastle —”
“Therefore, 14 businesses have opened since the inception of the scheme and as a result of my predecessor's initiative.”
“The Member is right. No matter what town I go to in Northern Ireland, traders and business owners always raise issues about rates. <BR /> <BR />To answer the Member's specific question, I am very pleased to be able to report that a total of 331 properties across Northern Ireland have benefited since empty premises relief was introduced in April 2012. That means that £1·367 million of rates relief has been allocated to those properties over that period. <BR /> <BR />We do not have figures by constituency, but 14 properties have benefited in the North Down Borough Council area. That area covers most of the North Down constituency — there is just a little bit of Ards where I live that is not in there, but we will all be one big happy family in a number of months anyway.”
“I intend to announce the full details of the scheme in the next few weeks, once my Department has completed the overall costings to ensure that the scheme stays within the budget set by the Executive of £30 million for rates revenue forgone. That work had to wait until the outcome of the non-domestic revaluation was known and will be completed shortly.”
“I am considering the consultation outcomes before finalising the arrangements for next year's scheme. Our analysis to date suggests that the funding allocated by the Executive will deliver a scheme that will help everybody affected for a longer period than two years.”
“<BR /> <BR />As to the Member's question about this being a cause of further delay, I can assuage her concerns and calm her nerves. This will be a short, sharp piece of work carried out on our behalf. We have gone through a procurement process, and the people are in place and doing the work. I expect that it will take no more than four weeks and that I will have the report in front of me by the middle of November at the latest. It will not run and run so that parties that may wish to procrastinate further can say that they will wait for the outcome; they will have it in their hands within a number of weeks.”
“The Member is somewhat unfair in her criticism of the previous Social Development Minister, who did attempt to get work like this done. In fact, well before the summer, at a much higher level, the First Minister initially suggested that the Executive carry out work like this to do exactly what I said to Mrs Kelly, which is to get a genuine hollowing out of all the problems that we face with the current welfare legislation, the economic and social impacts and the cost to the Northern Ireland Executive of not progressing it. Unfortunately, there was a lack of agreement from Sinn Féin to move forward on that. I thought that there was still considerable merit in doing that work, and that is why I have taken it on. It will be copied to Executive colleagues to help to inform their overall deliberations.”
“It is a genuine attempt to carve a way through the morass of figures because people are clearly somewhat confused about what the truth is.”
“Some came through in the last Assembly mandate, when the Member's party was in charge of the Department for Social Development. Want I want to see from this work is that the current problem that we face, which is causing budgetary difficulties and political difficulties as a consequence of the budgetary problems, is independently reviewed and assessed. There are a lot of figures out there, and people are saying this and that. We need an authoritative independent review that hollows out the particular set of circumstances that we now face. That is the spirit in which the work has been commissioned. It will be carried out independently, and I hope that the figures and conclusions that come from it will be accepted on all sides of the House, because that is the spirit in which they are being offered.”
“If we knew what the future cuts will be and had that sort of precise information about the future, perhaps we would do the lottery at the weekend. I assume that the Member is referring to comments made by the Chancellor in the past few weeks. They have to be seen in the context of being pre-election commitments or statements. It will be interesting to see whether they survive after the next election, no matter who is in power. Those things are interesting and show that the future direction of policy on welfare at a macro-UK level will continue to be restraint. That is why we have to get our act together on welfare here in Northern Ireland. <BR /> <BR />We have already seen swathes of welfare reform legislation come through, many of which are having a difficult impact on people in Northern Ireland.”
“Therefore, in some respects, with regard to the figure of £500 million out of £750 million — I am not saying that I accept all the figures — there is accountability on the other side of the House for those reductions.”
“<BR /> <BR />I see that a former Minister for Social Development is in the House. Some of the reductions in our overall welfare expenditure are the result of legislation that he passed, or perhaps it was his predecessor who started that legislation. I was the Chair of the Committee during that entire period, but it went through when Mr Attwood was Minister. Issues such as the 1% uplifting of benefits, which was lower than had previously been the case, were voted through the Assembly. In many cases and in those cases in particular, the House voted for them. Some of the parties that oppose the passage of the current welfare reform legislation voted through or certainly did nothing to stop those impacts on welfare in Northern Ireland.”
“I think that NICVA is being unfairly tarnished by that. Work was carried out on NICVA's behalf by people at Sheffield Hallam University. That figure is out there and has been cited by many, so it has become somewhat authoritative. From listening to contributions on the radio, particularly that of Seamus McAleavey from NICVA, it has been very clear, certainly in the last fortnight, that some have taken the full figure of £750 million and thrown it out there as being the gospel truth on what is being lost, when, by NICVA's own admission, £500 million of that has already gone from Northern Ireland's budget. There are multiple reasons for that, and they are very clear. Some have been passed because of changes that took place at Westminster that we have no control over, and some have taken place because of decisions in this House.”
“We cannot tolerate that, and it needs to be addressed as quickly as possible.”
“The figures that I know that are really starting to bite relate to the fact that, every week that passes, £1·6 million of public expenditure that could help people in Northern Ireland is not helping them, because we are paying welfare reform penalties this year. With every month that passes, £7·2 million is lost to the Executive.”
“<BR /> <BR />I was before the Finance and Personnel Committee some weeks ago and was pressed by three members of the Member's party to do work like that. I shared with them the fact that it was already my intention to do work like that, because, whilst the Executive had spoken about doing some work, they had not been able to agree to take it forward, so I thought that, to help to inform the situation, I should do it. I took the Committee's comments as an endorsement of that work. We need an independent review that helps to inform the situation better, because there are a lot of figures floating about out there, not least the many figures being thrown out erroneously by members of his party.”
“They include the policy implications for the Northern Ireland Executive of not maintaining welfare parity; an assessment of the modelling assumptions that currently exist for welfare reform; an assessment of the regional economic impact that the proposed national welfare agenda may have, which includes opportunity costs of forgone public expenditure due to penalties; and the additional consequences that might flow from continuing to deviate from national welfare reform policy, including the implications for IT systems and the delivery of social security payments. Those are not all the things that it will look at, but I am sure that there would not be much dissent from any quarter of the House on whether we should look at those things and get an independent view.”
“As I pointed out in my initial response, the terms of reference have been drafted by my Department and shared with the Department for Social Development. Whilst I have not got explicit or particular cross-party support for the terms of reference, they touch on a range of subjects that I am sure everyone agrees need to be looked at.”
“In order to provide some much needed clarity on the impact of welfare reform, I have commissioned an independent review, the terms of reference for which have been draw up by my officials and shared with the Department for Social Development.”
“Mr Deputy Speaker, with your permission, I would like to answer questions 3 and 5 together. <BR /> <BR />The issue with the report on the impact of welfare reform on Northern Ireland, commissioned by NICVA, is not so much with the report itself but rather with how the information has been interpreted by some parties. Indeed, NICVA recently stated that some £500 million of the much quoted £750 million that will be taken out of Northern Ireland as a result of welfare reform relates to changes that have already taken place or which are outside the control of the Northern Ireland Executive. In addition, the NICVA report focuses only on one side of the equation and takes no account of the potential impact of welfare reform on local labour markets or of the adverse impact of reductions in departmental budgets as a result of non-implementation.”
“It also involves decanting, and my Department has been very active in moving out of some leased estate that we have and going back into some of our own estate or moving into new offices that are better suited to modern work practices. That is saving a considerable amount of money, year on year, but that needs to be continually assessed and looked at on an ongoing basis because opportunities will present themselves. <BR /> <BR />The Executive have actively pursued realising benefits from assets sales over this Budget period, and the Member will recall that, at the start of this Budget period, it was our capital budget that was under real pressure and we needed to sell assets to get money to invest in infrastructure. That has happened and will continue to happen where and when it is appropriate.”
“I do not have a list of all the assets. I am sure that, if I had that list and started to read it out to the Member, I would exceed my two minutes. I would probably take the entirety of the remainder of Question Time, including Health questions. <BR /> <BR />There is an active asset management strategy in place that has been agreed by the Executive, and it is taken forward primarily by properties division in my Department and in conjunction with OFMDFM. That is identifying, on an ongoing basis, those assets that are no longer required by the public sector and looking at the best option for realising and accruing better benefits for the public sector, and that could involve selling those assets and getting a capital receipt. Sometimes it involves getting planning permission for an asset or a site so that you increase the value of it.”
“I think that I made it pretty clear that I think that there is merit in some type of scheme moving forward, because, when the scheme was introduced, we were in the middle of the recession, and whilst we can confidently say that we are in recovery now, certain sectors, particularly retail, continue to suffer in particular parts of Northern Ireland. So, there is probably a need, I believe, for some sort of scheme to continue. The complexion and the quantum of that will be something that the work of NICEP will help to inform. Above and beyond that, none of the other rate reliefs will be taken off the table or done away with in the next financial year.”
“The Member and, I am sure, the House will be aware that the small business rate relief scheme, which was introduced a number of years ago and which has been extended twice since, has a shelf life whereby it ends at the end of this financial year. I have initiated and am close to the conclusion of a review that is being carried out by the Northern Ireland Centre for Economic Policy (NICEP) into the merits of the scheme and how it has functioned, and, of course, that will then inform any decision that I might want to make, in the context of next year's Budget, as to whether we extend that scheme any further. That is the only one that there is no doubt or a question mark over.”
“I hope to have that piece of work and the conclusions contained therein with Executive colleagues in the next number of weeks. Our initial reading of that is that, in having very clearly defined social and economic benefits for Northern Ireland, there are no other or not many taxes available to us or ones that we might take that would have the same transformative effect that corporation tax would have or which would pass that affordability test.”
“On that basis, we have supported and have gained the devolution of air passenger duty for long haul flights in the past because it was affordable and it secured our only direct flight into North America. We continue to pursue, and I remain optimistic that we will get, the power to devolve corporation tax to Northern Ireland. Whilst that is more expensive than air passenger duty for long haul flights, it is, I think, affordable, and it does produce the very clear long-term benefits of increased jobs, and jobs that pay well in excess of the average wage in Northern Ireland. <BR /> <BR />My Department has undertaken a piece of work on other powers that could be devolved to Northern Ireland, consistent with the commitment made in the economic pact that was agreed with the Prime Minister in June 2013.”
“I might be the only person in the House, but I think that I know what the Member is getting at. There seems to be some confusion in different quarters. I suspect that he is talking about the Executive taking on more tax-varying powers that might assist us in some way or another. Again, I think that I have been fairly consistent in coming to the House and saying that I do not have a reflexive, knee-jerk response to it where I think that all tax-varying powers should be ruled out. It is quite the opposite. I think that I have set down very clearly the tests that I think need to be passed on further tax devolution to the Assembly. One is that it needs to be affordable; secondly, it needs to have a very clear social and/or economic benefit to Northern Ireland.”
“In Budget 2011-15, the Executive agreed that the levels of domestic and non-domestic regional rates would be increased in line with inflation. For next year’s budget, my Department is working on the assumption that this policy will continue and that the level of the regional rate for the 2015-16 year will increase by the rate of inflation.”
“— Sinn Féin expects us to go off to London and ask for them to give us the money to pay for it.”
“To be fair, most Ministers, including the Member's party colleague and, indeed, other Ministers, including party colleagues of mine, have contacted me and said that they are content with the solution that I have put forward. Unfortunately, the problem and the blockage on this matter rest with Sinn Féin, which wants a solution that, I believe, does not take cognisance of the fact that there is no legal entitlement. If we were to follow through with that solution, it would be unaffordable to the Executive. Surprise, surprise —”
“We will continue to work over the next while to try to make contact with those who are entitled to ensure that they get what they are entitled to. <BR /> <BR />The other issue that has been raised with me several times in this House is in respect of former employees of the NIO and the police. I think that the House knows my position on this. I want to deal with that issue. I always repeat, at the risk of sounding like a stuck record on this matter, that there is no legal entitlement for those people to have access to the previous equal pay settlement. Notwithstanding that, I think that there is a moral case. I have put a solution to the Executive that I think deals with the matter to address that moral case that I believe is there. Unfortunately, that has not found favour on all sides of the Executive.”
“When I hear "equal pay", I know and the Member will be aware that there are at least two issues. One is for those who are leavers and retirees, and the Member will be aware that, over the last number of months, the Department has settled that case with the union and is actively trying to ensure that those who are entitled gain access to that settlement. That was, of course, changed by the number of years one was out of service, and I think it was the Abdulla case in Birmingham City Council that changed the legal position in respect of that. I cannot remember the precise figure, but my understanding is that the vast majority of cases have been settled and that there is a residue of a number of cases that have not been settled.”
“Of course, section 59 of the 1998 Act empowers the permanent secretary of my Department to allocate up to 95% of the previous year's Budget to the next year's Budget, but I think that everybody in the House will agree that we do not want to get into a situation in which civil servants are making that sort of decision. We should have the ability and courage to move forward with what will be a very difficult Budget and to take necessary decisions in the coming days and weeks to ensure that we have a balanced budget and a credible plan to move forward on that basis.”
“So, in the first instance, we need to agree a Budget to ensure that we can access that money, and all those hellish, nightmarish scenarios around cuts to public services can be avoided. <BR /> <BR />In the longer term, I suppose, there is a concern that the deadlock will continue, primarily because of a lack of agreement on welfare reform and the ramifications that that will have for next year's Budget, in penalties and other costs, and we are unable to agree a total Budget. I remain optimistic that we can get a draft Budget out the door, and I will be making every effort in the coming days and weeks to ensure that we meet the deadline of having it agreed by the end of October.”
“The Member is trying to lure me into a scenario that I do not want to contemplate, which is not having a Budget in place for next year. There are two ramifications, one of which is in the short term. The letter from the Chancellor of the Exchequer to the First Minister was shared with Members yesterday, and it was very clear. There is a condition within it that we have to agree a credible plan and a balanced Budget by the end of this month if we wish to access the £100 million facility made available through the national reserve. I think that I have made clear over the last number of days — certainly, yesterday — how necessary that £100 million is to ensuring that we live within our means this year.”
“<BR /> <BR />I am sure that my party's Members of Parliament will ensure that Northern Ireland's voice is heard in Parliament and that, where there are unnecessary, unfair reductions to our Budget, the Government in Westminster will hear, loudly and clearly, that they are not acceptable. I wish that others would perhaps join us in making that call in the appropriate place.”
“Departments are having pressures as well, although he is right to point out that many of the inescapable pressures that we have addressed became inescapable because of the stage in the financial year at which we were taking decisions to trim other budgets to help to pay for them. Yes, they were deemed to be inescapable, but the degree to which they became inescapable was exacerbated by our lack of taking a sensible decision, back in June — a decision to take the full 4·4% out at that time, which I recommended but which the Executive did not endorse. The Member is right: there are other pressures. They include the fact that our resource budget has remained fairly flat. It has risen, but, in real terms, it is due to go down by 1·6% next year. That presents a challenge on top of all those other challenges that we face.”
“The Member is right to identify that our Budget is facing a number of pressures. I have not denied that, do not deny it and will not deny it. I have spoken at length in the House about the pressure that not progressing with welfare reform is having. No one in the House, regardless of their position on the policy of welfare reform, can deny that the pressure is increasing. Last year, it was £13 million; this year, it is £87 million; and, next year, it will be £114 million. That pressure will grow and grow. According to work that DSD has carried out, it is anticipated that in excess of £300 million will come out of our Budget in 2018-19, if we have not progressed with welfare reform legislation by that stage. <BR /> <BR />There are other pressures. The Member will be aware of pressures in respect of public sector pensions.”
“That is what we tried to deal with in the October monitoring round. Whilst I think that it is noble and correct to aim to end the divisions in our society, it is not as immediate and pressing as the issue of welfare reform in the context of this year's Budget. However, that does not mean that Members, including myself, or anybody else should be dismissive of trying to break down barriers that are costing government in Northern Ireland money on an ongoing basis.”
“I do not want to be dismissive of the idea, notion or aspiration of ending a divided society and having a more united, and therefore more prosperous, society in Northern Ireland. I think that that is an aim that all of us share. We all have to continue to ensure that we are making every effort that we can to meet that goal. I suppose that it depends on how the Member would define "long term". He is older than me, so long term might be longer for him than it is for me. <BR /> <BR />The immediate problem that we have is around our Budget. That is exacerbated and not helped at all by what we are having to repay. I know that the Member agrees with me in this regard. The penalties that we are having to pay — £87 million this year and £114 million next year — are creating a real present and pressing problem.”
“They were things that, legally, we had to do, in this case as the result of a court judgement.”
“That question would probably have been better put to me yesterday. I will do my best, and, if I leave anything out, I will ensure that the Member is written to and informed fully. A pressure had developed. There were two elements that fed into the pressure of over £7million in the PPS. One was to do with casework pressures, but the larger amount was to do with the resolution of a pay settlement in a case that had been settled in the courts earlier this year or late last year. So, it became a legal and contractual requirement and therefore inescapable, as indeed were many of the other pressures that were addressed in the £125 million allocation. They were not necessarily things that we wanted to do or that fitted in with the Executive's strategy of delivering Programme for Government targets.”
“This has allowed the Executive to make allocations of £125 million to mitigate the worst impact of these reductions. However, this is far from an ideal solution. It is most unfortunate that the intransigence of some in the Executive has enforced the need to call upon the £100 million facility. This will make the 2015-16 Budget considerably more difficult because, in addition to having to cover £114 million of welfare reform savings lost to Treasury, we will now be faced with repaying an additional £100 million.”
“With your permission Mr Deputy Speaker, I would like to answer questions 1 and 14 together, as they relate to the same issue of budgetary pressures and possible consequences of continued deadlock in the Executive. <BR /> <BR />As Members will be aware, the Executive agreed the October monitoring resource allocations on 9 October. I updated the Assembly on the outcome of this in my statement yesterday. The June monitoring round agreed resource departmental expenditure limit (DEL) reductions of £77·9 million, equating to 2·1%. An additional 2·3% reduction was required to meet the £87 million cost of not implementing welfare reform. This has now been agreed. <BR /> <BR />Through negotiations with Her Majesty's Treasury, I have secured access to the reserve in 2014-15 of up to £100 million.”