Northern Ireland Affairs Committee
Oral evidence: Work of the Secretary of State for Northern Ireland, HC 86
Tuesday 25 April 2023
Ordered by the House of Commons to be published on 25 April 2023.
Members present: Simon Hoare (Chair); Stephen Farry; Mary Kelly Foy; Sir Robert Goodwill; Claire Hanna; Carla Lockhart; Jim Shannon; Bob Stewart.
Questions 419-492
Witnesses
I: Rt Hon Chris Heaton-Harris MP, Secretary of State for Northern Ireland; Madeleine Alessandri CMG, Permanent Secretary, Northern Ireland Office; Mark Davies, Director, Windsor Framework Taskforce, Northern Ireland Office; Colin Perry, Director, Economy and Protocol, Northern Ireland Office.
Witnesses: Rt Hon Chris Heaton-Harris MP, Madeleine Alessandri CMG, Mark Davies and Colin Perry.
Q419 Chair: Good afternoon, colleagues; good afternoon, Secretary of State and the NIO team. Thank you for joining us for the session this afternoon. As you know, we are focusing on Windsor and public finances—two issues that you will understand the importance of, for both this Committee and, of course, the vast majority of people in Northern Ireland.
If you would like to make some opening, scene-setting remarks, to introduce your team or whatever, you are very welcome so to do.
Chris Heaton-Harris: Thank you very much indeed. I will take that opportunity. Thank you for inviting me to come before the Committee again. I will introduce the people with me. Madeleine Alessandri is my permanent secretary; Mark Davies, on my left, helped hugely—he was locked in a room with interesting people in Brussels for a very long period of time—on the taskforce negotiating the Windsor framework; and we have Colin Perry. If I may indulge the Committee, Colin has been a civil servant for 38 years and is just about to retire. He has been with the NIO for eight years of that and really has served us as—
Chair: Is this where you expect us to pause and say, “You don’t look old enough to be retiring, Mr Perry”?
Chris Heaton-Harris: He didn’t look old enough until he got the job of dealing with the budget for Northern Ireland; he rapidly aged after that.
As I hope people will have seen, my Department has been quite busy over the past few weeks with the 25th anniversary of the Belfast/Good Friday agreement. I was delighted, Chair, to welcome you and other Members to some of the events that showcased the tremendous progress that Northern Ireland has made over the last 25 years. Everyone here knows that the agreement remains, to this day, a towering achievement, which brought an end to almost 30 years of Troubles in Northern Ireland and ushered in an era of increasing prosperity and growing reconciliation.
It has been a pleasure over the last few weeks to welcome President Biden, the Taoiseach, the Tánaiste, special envoy Joe Kennedy III, President and Secretary Clinton, the current Prime Minister, three former Prime Ministers, and a whole host of others, but especially Senator George Mitchell, who gave one of the most impressive political speeches I think I have ever heard—definitely, actually—in my time as a politician. It was a privilege just to be in the room for that speech. The anniversary provided a unique opportunity to reflect on Northern Ireland’s enormous progress and to strengthen our relationships, to explore how we can deepen Northern Ireland’s prosperity in the coming quarter century.
On that note, I think we are going to be very busy as we move forward, because there will be a Northern Ireland investment summit led by the Department for Business and Trade, in partnership with my Department, to encourage inward investment and growth in the coming months, for example. Schools are continuing to use a raft of teaching materials we have supported for the anniversary, so children right across the United Kingdom can learn more about the agreement and how important it is in the history of the United Kingdom. Looking further ahead, we will celebrate the ties across the UK and Ireland with the joint bid for Euro 2028—a fantastic opportunity for Northern Ireland. I am delighted that Casement Park has been selected as one of the bid stadiums.
We have also further secured the achievements of the Belfast/Good Friday agreement by one of the things we will be talking about today, which is the Windsor framework. The framework marks a turning point for the people of Northern Ireland, because it puts power back in their hands, where it should always have been. [Interruption.] Please excuse me; I have a bit of a cold—it was meeting all those people last week. The Windsor framework will deliver stability for the people of Northern Ireland, protects Northern Ireland’s place in the Union and preserves the balance, which we talked about so much last week, in the Belfast/Good Friday agreement.
In other news, while all that has been going on, and equally importantly, we have been able to reach an agreement with Ireland and the European Commission on Peace Plus, the new cross-border programme aimed at peace and economic stability in Northern Ireland and the broader region of Ireland. That is a really critical milestone towards the programme launch, ensuring that funding can flow to those who need it most and deliver on the essential projects that promote stability, foster cohesion, build prosperity and support levelling up across Northern Ireland’s community. The UK will provide more than £730 million to the programme—about three quarters of its budget—which is a huge investment in peace and prosperity as we mark the anniversary that I am talking about.
I will leave it there, Chair. I could say a lot more about what my Department has been up to, but I want to make sure that we are able to answer your questions. My team are the experts on the areas that you want to talk about, and I will certainly be passing all the difficult questions to them.
Q420 Chair: Thank you, Secretary of State. I echo your observations about last week, in particular George Mitchell’s speech. I think that anybody who has an interest in the cordiality of the east-west relationship, and understands the benefit of cordiality, will have been struck by the warmth of the relationship between you and the Tánaiste and between the Taoiseach and the Prime Minister.
Last week was last week. Motivated by the status of both countries as co-guarantors of the Good Friday agreement, what is the scope for more bilaterals, deepening that cordiality, and extending that friendship for mutual benefit?
Chris Heaton-Harris: There is huge potential. We should not be shy in being friends with neighbours. It is much better being in a friendly relationship than not. Just for complete clarity for the Committee, there will be areas where we disagree fundamentally, because we have different political positions on different things, but I do have a good relationship with the Tánaiste and I would like to think that I had a very good relationship, and still do, with Simon Coveney, the Foreign Minister before him. It is an important one, because I own that relationship with the Irish Government on behalf of the British Government.
I have been Secretary of State for seven months or so. We have been able to demonstrate that we are taking the institutions that were set up by the Belfast/Good Friday agreement incredibly seriously, to demonstrate to everybody formally that we are working together. That includes the British-Irish Intergovernmental Conference, and the British-Irish Council, which the Prime Minister attended in Blackpool—the first Prime Minister to attend one of those in over a decade. In both a formal and an informal sense, we meet regularly at all sorts of different things. We have phone calls regularly. There are lots of issues of mutual concern and benefit that we like to talk about.
Q421 Chair: Windsor is undoubtedly a feather in the cap of the Government and the commitment that the Prime Minister, you and the Foreign Secretary have to pragmatic negotiation, listening and addressing concerns in collaboration with the EU. The overwhelming vote in the Commons underscored that as, I think, a general view towards it.
Last week, you and I heard from virtually every speaker who had been involved in the run-up to ’98, and then ’98 itself, of the imperative of listening to other people’s concerns, worries and anxieties—one does not always have to agree with them—with respect, and trying where at all possible to address them in order to make progress. You will know that there are still some questions in the minds of some with regard to what all of this protocol/Windsor issue does for the status of the Union, the Act of Union and so on. There have been—I do not use this phrase in a dismissive way—carrots dangled at the hint of side legislation here in Westminster to address that. Many people will see that as being very important. I am sure that lots of people could easily see that as the last pulling open of the bolt, which will allow the doors of the restoration of Stormont to be thrown open and people to get on with the job at hand. Can you give us some indication as to the what, the why, the how and the when?
Chris Heaton-Harris: Elements of it I can, but obviously I cannot speak for the Unionist communities and their political representatives as to what they would see as their ask in this space. I would like to think that I have a good idea, but I am always listening, because I want to be able to demonstrate, without any equivocation—I think that I did last week, and I will continue to do so—that Northern Ireland is an integral, important, strong part of the Union of the United Kingdom, and that the British Government is a Unionist Government and wants it to stay so until such time as the people of Northern Ireland themselves choose otherwise.
There are elements of that that people have said have been brought into question—and I can quite understand why—by the Northern Ireland protocol. Again, the Windsor framework is not perfection in terms of sorting out all these issues, but it goes a long way to doing it. Actually, when it is implemented, I think you will see that a whole host of the concerns and questions that people are raising on a daily basis will disappear. We can talk about some of those in a moment.
But what is actually required by the Unionist community and their politicians I am afraid is a question really for them. We indicated in the Command Paper the sorts of things that we could possibly do, but whether that is on the list of items is a matter for other people.
Q422 Chair: I take that point entirely, and doubtless we as a Committee will seek to have conversations and explore that. What is your Department’s mechanism, if any is currently envisaged, for saying, “We think that we understand the essay question and we think that this might be our answer to it, but is our understanding of the essay question correct?” How does one tie people down to fix where the goalposts are and not shift and shunt them? What is the process envisaged? Again, I think that probably all of us will have taken away from last week that people are usually prepared to make compromise and accommodation if there is a fundamental foundation stone of trust. That trust has been in short supply.
You have said, as have previous Prime Ministers and previous holders of your office, that, post protocol, the constitutional position of Northern Ireland remains unchanged and intact. There are some who do not trust the word of Westminster. It is not personal; they just do not trust the word of Westminster and they are always going to be sold out, shafted, tucked up, cheated, bamboozled or whatever. What is the strategy to try to understand the essay question and make sure that the answer fits to rebuild that trust to get Stormont up?
Chris Heaton-Harris: Not that I could ever learn enough from George Mitchell, but I would like to think that we have learned a thing or two from the thousands of conversations that need to take place at every level—and they are—with the Unionist community and nearly all of their political representatives and other representatives. I am yet to be able to determine the exact items that would be on that on that shopping list, as you put it.
Q423 Chair: For my final bit of this session before I turn to colleagues, what level of urgency and topspin is on all of this? I appreciate that negotiators are pretty exhausted post Windsor and then we went into all the Good Friday commemoration stuff, so there needs to be time to pause, catch your breath and take stock. But we know, because we have been talking about this in the public finances debate, of the pressing need to get Stormont up and running.
If this is identified as the key that could do it, is there an expectation that if there is a legislative answer to this essay question, one should see it in this Session—before November? Should we expect to see it before summer recess? Is this something to be announced in the King’s Speech? This is a Parliament that is running at some point towards the end of its course, and I think the people of Northern Ireland are hoping for some pretty speedy progress.
Chris Heaton-Harris: Yes. As you know—I keep repeating this—I am a glass-half-full person. I do think this is achievable, and I think it is achievable in relatively short order. But I learned very quickly that in Northern Ireland you don’t put deadlines or timelines on anything. As George Mitchell reminded us last week, when he was sold the job it was sold as a quick job that would take only a couple of months to sort out—
Chair: I think John Major had said to him he would be home by Christmas but didn’t stipulate which year.
Chris Heaton-Harris: Yes, he didn’t stipulate which year. There is no break in the conversations that we are having, because this is important. Everybody wants to get Stormont up and running as quickly as they possibly can.
Q424 Chair: Yes, but can you give us confidence or comfort on this? In the conversations that I have with Mr and Mrs Smith who live in Northern Ireland—not as part of a group but just in daily conversations—I detect a growing frustration, and therefore disappointment, in the doing of politics, running the risk of their opting out of the political process. I take your point entirely that you cannot rush these things and so on, but notwithstanding that, there does need to be some urgency. If this is the thing that allows directly elected politicians in Stormont to start addressing those ever-pressing—and particularly pressing now—public policy issues and demands that so many people across the communities of Northern Ireland have, we can’t just “mañana” it, can we?
Chris Heaton-Harris: I understand your question and the point you are making alongside it. Going back to a previous point about trust, there was a level of trust that was lost between the UK Government and the Unionist community, and we have to regain it. That is why there are all the questions about the Windsor framework, which we will answer. When it is being implemented, I like to think it will be almost like the Ronseal framework, because it will do what it says on the tin. Equally, my door and the Prime Minister’s are always open for those who have the answer to the exam question.
Chair: Thank you. Jim Shannon.
Q425 Jim Shannon: Secretary of State, it is always a pleasure to see you. I feel that I need to be ever respectful to you, Mr Chairman, and the Secretary of State—I understand that—but I hope you will understand why I make these comments.
Secretary of State, over this last period of time, your attitude towards Unionism is one that we as a party feel particularly aggrieved about. You might ask yourself why that is. It is because your opinion of Unionism is a very different opinion of Unionism to the one that we have. I read the comments that you made at Queen’s University. From a Unionist point of view—from our point of view—we feel that your attitude and the words that you chose were dismissive of Unionism. If you, as Secretary of State, wish to engage with the Unionist party and feel that that engagement can be constructive and positive—and I think that is what you want—you need to pick your words much more carefully.
My party, the DUP, and my leader, Jeffrey Donaldson, felt that in your comments towards us as a party you put forward a “Unionism, take it or leave it” type of attitude. Ever mindful that Bertie Ahern and Tony Blair have both indicated that no process can go forward without full participation—in other words, Unionism, of which we as a party represent the major part, needs to be part of that process.
I would suggest, Secretary of State, that what you tried to do was to disarm the DUP and bully them towards a point of view, but what you have done is to arm loyalism and Unionism back home on the streets. If those are your intentions—I believe they are not, by the way, but if that is what you have done, and I believe you have done that, those words were inflammatory, badly chosen and unfortunate from your point of view, and I think you have a lot of work to do.
Chair: Could we have a question, Jim?
Jim Shannon: I am coming to the question, but I have to make these comments. Margaret Thatcher was a lady who said—I have used her comments many times, in a very respectful way—that Northern Ireland and Ulster were “as British as Finchley”. At this moment in time, we do not feel that. My question to you is this. In light of what you have done and how you have harmed and disrespected Unionism, how do you expect Unionism to move forward in a positive fashion? We want to work with you in a positive fashion, but your words have not helped that to happen. Secondly—
Chair: Why don’t we let the Secretary of State take that first question?
Jim Shannon: Yes. Ever mindful that, as the Chair said, we are here to listen to the people’s words and anxieties, I have given you some of the anxieties of Unionism at this time. I have a second question, but that is one for now.
Chris Heaton-Harris: Forgive me for gently pushing back—
Chair: You can be as ungentle as you like. We are all grown-ups here. We can all be as robust as we wish to be.
Chris Heaton-Harris: I will always be robust, but I also have huge respect for the Member for Strangford. Anybody who saw his contribution in the Belfast/Good Friday debate will understand why that respect has only risen over the last few weeks. But I fundamentally disagree, and I stand by every word that I said. I actually do believe there is a really positive future for the Union that comes from what we have managed to achieve in the Windsor framework, which means that the Union can get stronger in the not-too-distant future with the institutions up and running. But I think there is a danger, without those institutions up and running, that people start to question them. When people start to question the institutions and whether those institutions are working for them, that is when people start to cast around for alternatives.
That is something that I think, as Secretary of State for Northern Ireland, I have every right to say. I hope people would have understood my words for exactly what they were, which is that we in the United Kingdom—I said this—are proud of Northern Ireland’s place in our Union and want it to become stronger. This is a Unionist Government. There are other alternative Governments available that might not be quite as Unionist in the future. We will stand by and do everything we can to strengthen and protect the Union.
Jim Shannon: Mr Chairman—
Chair: What is your second question, Mr Shannon?
Q426 Jim Shannon: My question that I hoped the Secretary of State would answer was: how is he going to reach out to Unionism to find a solution and a way forward that embraces Unionism as very significant part of the agreement? That has not been answered.
My second question that I wish to ask is this. Secretary of State, you and I have bandied about this question in the Chamber in the past, and it is to do with the Stormont brake. My party held our fire until we got the legal opinion, and the legal opinion says that the words of the Stormont brake are not worth the paper they are written on. The LCC, the loyalist coalition, also got a different legal opinion—it was the same opinion. The Orange Order got a legal opinion, again from a different law company, and it got the same opinion. Your own ERG, which you used to be a member of, whenever Unionism was important, also got a legal opinion, and it came back saying that the brake was not worth the paper it was written on.
Secretary of State, with great respect, on this Stormont brake, there is all this legal opinion coming from all across the United Kingdom from different Unionist forums and people who support the Union, which you say that you support. How can you honestly say that the Stormont brake means anything when we have all this legal opinion, coming from all sides—from all different groups that support the Union—saying that it isn’t worth the paper that it is written on? For that reason, you have a lot more to do to satisfy Unionism and ensure that we can be part of the process moving forward.
Chris Heaton-Harris: I think, actually, the one sure way of demonstrating any legal opinion—I am pretty sure that you can get plenty of other legal opinions as well, should you want—is to get into Stormont and see, when the need arises, what happens when the brake is activated. Until that point, you are talking theory.
Jim Shannon: I am talking legal opinion.
Chris Heaton-Harris: We have put into law something that we believe will work and will do exactly what it says. It does need to be tested. I want it to be tested, because I believe that it will then demonstrate to those who do not believe that it is going to work that it does.
Q427 Jim Shannon: So you think that all the legal opinion that we have got from different law companies across the United Kingdom, and indeed further afield, doesn’t mean anything?
Chris Heaton-Harris: Let’s just say that the people who make the law truly believe that it does what the people who interpret the law, in the particular opinions that you are talking about, disagree with. We believe that it will work.
Chair: This is Elon Musk and his rocket, isn’t it? It needs to get up in the air to test it, rather than looking at the drawings.
Chris Heaton-Harris: It needs to be a bit better than that.
Q428 Jim Shannon: The legal opinions that we are referring to were very clear. We did not seek a certain opinion. That is why we never said anything; we waited until we got it all back. All those different organisations got the same opinion back from law companies. We cannot ignore all this volume of law.
Chair: That’s not strictly true, Mr Shannon. Two of your colleagues said, “No,” before the ink was dry.
Jim Shannon: I am talking about the legal opinions. We had five different legal opinions from five different organisations that all said the same thing. Secretary of State, it is not a matter of trying it. Whenever I get a legal opinion, I usually listen to it. If I get it five times, I listen to it every time.
Chris Heaton-Harris: Okay. The Government believe fundamentally, 100%, that the Stormont brake will work, and we have made law in that fashion. The way to test that legal opinion is to use it.
Jim Shannon: We will have to agree to differ on this one, I think. I am going to back and stand by the five different legal opinions that we have, because they cannot be ignored—against your one, by the way.
Q429 Bob Stewart: Nice to be here, Secretary of State, and nice to see you here—all of you. My question is really a practical one about the Stormont brake in operation. Can the Stormont brake work if the Executive is not sitting? I think I know the answer to that, but I am asking it. What happens if the European Union disagrees with the Stormont brake?
Chris Heaton-Harris: First, for the Stormont brake to work, initially Stormont has to be sitting, yes.
Q430 Bob Stewart: Are there ways around it?
Chris Heaton-Harris: Not initially, but written into the Stormont brake is an element that says that, should Stormont then not be working, MLAs who are showing their best endeavours can operate the Stormont brake at that time.
Mark Davies: It cannot begin to function until we have an Executive back up and running, but as the Secretary of State says, in the legal text there is reference to—
Q431 Bob Stewart: So it is dead in the water until then.
Mark Davies: Yes, until that point. Subsequent to that, it can only be used, if the Executive is no longer functioning, by two parties who have made a notification where those parties are seeking in good faith to operate the institutions, and there are various examples set out in the text. Until there is an Executive, it cannot be there. Once there is an Executive, it can be operated, but the people using it must meet certain conditions.
Q432 Bob Stewart: I get that. We have a lot to cover, so I accept that answer. What happens if the brake is applied and the European Union disagrees with it?
Chris Heaton-Harris: When the brake is applied, the UK Government, in the Joint Committee with the European Union, talks to the European Union about why something is fundamentally not liked by the community or the 30 or 30-plus MLAs who have a concern. It could be then—again, this is a bit theoretical because it has yet to be tested—that the European Commission could choose a whole host of different routes, but the one thing that we would always have at that stage, because of where this now sits in the treaty, is that if the European Commission chose not to change tack, having had the Stormont brake activated, the UK Government could, at the end of this process, veto that.
Bob Stewart: Veto it. Okay, thank you.
Q433 Carla Lockhart: On the Stormont brake, you have been very clear that you believe it will work, that the Government believe it will work; but surely it will only work if the Government, not Stormont, use it. Is that not the case? The Prime Minister stood in the House of Commons and said that the Stormont brake is there to be exercised by the Stormont institution, but that has been proven not to be the case.
Chris Heaton-Harris: It is the UK Government in the Joint Committee with the European Commission. That is where the brake becomes a veto.
Mark Davies: As we set out during the debate, there are two steps that happen. The first is, as you say, when 30 MLAs bring a notification forward, the Government is under a duty, where that meets the relevant conditions, to trigger the brake. Whether or not the brake is triggered—
Q434 Carla Lockhart: So it is only the Government, not Stormont.
Chris Heaton-Harris: No, Stormont implements the brake. The Government, at the end of the process, has the veto.
Mark Davies: Yes. The brake enables the MLAs to make the notification. Where that meets the conditions, we are under a duty to trigger it. At that stage, the rule does not apply in Northern Ireland, and then that moves into a process in the Joint Committee, where the Government is under a series of strict statutory criteria as to the decisions it can take, and it is under an obligation to veto that rule unless it would not impose new regulatory barriers or there are exceptional circumstances. So we have put in place a variety of safeguards that mean that there is power put in the hands of the Stormont institutions. As the Secretary of State set out earlier, they are now set out in statute that guides the Government in terms of the final decisions that it takes.
Just to add to the reply to Mr Stewart’s question, all of those are processes that are going on within the UK. The EU can ask for additional information, which is the only element of that that they can do as part of the initial process. Beyond that, the rule is suspended; it does not apply, and the only available route at that stage is international independent arbitration, not any process through the ECJ, and that is not something that the EU can seek to block. I think we set this out during the debates, but in our view that is a very strong and powerful democratic safeguard that, exactly as the Secretary of State says, we think will demonstrate in operation the powerful role it can provide for Stormont and the powerful safeguard it can provide overall.
Q435 Carla Lockhart: So it could become a veto, not will become a veto.
Chris Heaton-Harris: Actually, it is now a must, because the duty is now on the British Government.
Q436 Carla Lockhart: So it is the British Government who holds the power to veto, not Stormont—just to be clear.
Mark Davies: Yes, the rule falls to the UK and the UK-EU Joint Committee, because that is where a decision is ultimately taken.
Q437 Carla Lockhart: It is misleading, then, to tell the people of Northern Ireland that Stormont has the power.
Mark Davies: Stormont 100% has the power to trigger the use of that brake, because it is a notification by MLAs.
Q438 Carla Lockhart: To trigger, but not to veto.
Jim Shannon: The veto lies here.
Chris Heaton-Harris: It is between the UK Government and the European Commission in the Joint Committee.
Q439 Chair: As the signatories to the agreement. Stormont is not a signatory to the agreement, because the powers to enter international treaties are reserved to Westminster, not to the devolved Administrations. Otherwise, Scotland might have come up with something entirely different, and ditto Cardiff. That is the reasoning here, is it?
Carla Lockhart: That is the point I am trying to make: it is not the people of Northern Ireland.
Chris Heaton-Harris: The legislation sets in stone the actions that the Government will take.
Q440 Chair: We could spend a lot of time on this and doubtless we will on future occasions, but, Secretary of State, let me just ask you to confirm—briefly, if you will—two things. Can you confirm that it is still the case, as the Prime Minister told me at the Liaison Committee recently, that the options on the table are the protocol unamended by Windsor and the protocol amended by Windsor, but there is no scope for that exhaustive round of detailed negotiations between the United Kingdom Government and the European Union?
Chris Heaton-Harris: That is correct.
Q441 Chair: Secondly, to take Mr Shannon’s point now, I am no lawyer, but we all know you can ask 16 lawyers for an opinion on the same thing, and you will get 18 answers.
Jim Shannon: We asked five and they all had the same opinion.
Chair: The only thing we do know is that they will all send a bill and they will all expect it to be paid. Legal opinions are just that: they are a legal person’s opinion on a particular issue. But, Secretary of State, you are right to make the point that the best way of testing the robustness and the Government's interpretation of what they believe they have entered into is to try it in practice; and the only way that that could be done, if it ever needed to be applied—there’s always a presupposition that the brake would need to be applied; there’s no guarantee that it would, but presupposing that it did on a certain occasion—is in practical application, when Stormont is sitting, because that’s the only way the 30 MLAs can trigger it.
Were Mr. Shannon’s legal opinion to be proved to be correct and His Majesty’s Government’s legal opinion incorrect, there would in those circumstances—I think this comes back to the trust thing; the NIO and the Government are not proposing some sort of radical reform now of the formation rules for the Executive—be nothing which would stop any party collapsing it on a certain issue. If one still had that in one’s back pocket—a party’s right to collapse Stormont—that speaks to your point, does it not, of, “Get Stormont up and running and test the robustness of the Government’s stance in interpretation under law”?
Chris Heaton-Harris: I would like to think that when Stormont gets up and running and when the brake is tested, it will do exactly as I suggest it will.
Q442 Chair: But if it didn’t?
Chris Heaton-Harris: The parties will make their own political judgments.
Q443 Chair: And they would be unfettered in that?
Chris Heaton-Harris: Mm. But, equally, there is an element of—I will ask Mr Davies to come in on this—judicial review in this procedure, which I think also helps rather than hinders.
Mark Davies: This is why we were very clear in the Command Paper that since we were going to enshrine this in domestic law, this puts Ministers under a series of duties in domestic law, for which they are accountable in any decisions they make. There is a variety of provisions where they are accountable to Parliament, and to the extent people feel that the conditions weren’t followed, you can be accountable under the ordinary public law principles of judicial review. That is why we were so clear and keen to put this on to a sort of domestic law footing. It is now there—its operation—as a schedule to the Northern Ireland Act, exactly as we said we would do, precisely because we wanted those safeguards clear and in place.
Chris Heaton-Harris: In other words, if we were not to do what we say we are going to do with the Stormont brake, then at least five sets of lawyers could come and point that out.
Chair: Yes. So, in short, we have nothing to fear but fear itself.
Q444 Stephen Farry: Good afternoon, everyone. I would start by joining the Chair’s comments, recognising the scale of the events we have had in Northern Ireland over the past few weeks, with the presidential visit and then the conference at Queen’s University and other events on the margins. I recognise the contribution, in particular, given where we are, of the UK Prime Minister and the Northern Ireland Office, to the success of that fortnight.
I also pass on my thanks to Mr Perry, who I have crossed swords with in a very friendly and robust manner at times over the past eight years, going back to Stormont House, I believe. We wish Colin very well for his future.
Before I start, I have one question of clarity to follow up from something that the Chair asked at the very start regarding the potential for another piece of legislation. I appreciate that the Windsor framework is not open for renegotiation, but the other angle that is creating concern in Northern Ireland from perhaps other sections of the community lies with this potential threat to unpick the principle of consent through either amending the Northern Ireland Act or something else.
Could you clarify that the principle of consent as understood via the Good Friday agreement and the Northern Ireland Act is sacrosanct and will not be tampered with?
Chris Heaton-Harris: One hundred per cent.
Q445 Stephen Farry: I appreciate that answer.
Moving on to the Stormont brake, I take a different view on this: I see the Stormont brake as being far too cumbersome and in some ways unnecessary. I think that it is going to create difficulties in terms of the stability of the restored Assembly and potentially uncertainty for some investors in terms of what is going to be ongoing compliance with European Union law, but that is by the bye.
What I want to focus on is the emphasis around the process of how we engage with current and future EU law. In some respects, the Stormont brake comes at the end of the process, whenever the law has been developed. The aspect which I think is of far more significance is how stakeholders in Northern Ireland engage with the law from first principles. Secretary of State, perhaps you could elaborate a little bit more on how this is going to work via the different institutions—the Joint Committee, the Specialised Committee and the Joint Consultative Working Group—and some of the new bodies that have been mentioned as part of the Windsor framework—and how Northern Ireland stakeholders in particular will have improved access to that. Arising from that, I suppose, to what extent can the UK Government work with the European Commission just to ensure that forthcoming laws of particular relevance to Northern Ireland can be flagged up as quickly and as smoothly as possible?
Chris Heaton-Harris: Let me frame my comments by first saying thank you very much indeed for your opening comments about the events of the last couple of weeks and the effort made by the organisers at Ulster University for the visit of President Biden, and Queen’s University—and my Department equally in elements of that—for the Belfast/Good Friday agreement 25th anniversary. And indeed Mr Perry’s work, which we will scrutinise later.
Lots of this is actually set out in the political declaration that we issued at the time of the Windsor framework. We have agreed between the UK and the EU to establish regular engagement with Northern Ireland stakeholders, businesses and citizens at each level of the withdrawal agreement structures—and actually with the co-chairs of the Joint Committee. You could say that we have agreed a kind of additional membership of that Joint Committee with the First Minister and the Deputy First Minister to ensure that Northern Ireland’s voice is heard in that Committee, too.
The European Commission has also made commitments to enhance its engagement with Northern Ireland stakeholders on the limited subset of EU law that remains relevant to them. That engagement is separate to the role of the Assembly and that which the Stormont brake will give when the Assembly is restored. It will give Stormont a powerful role in the decision on whether or not significant new goods rules impacting on everyday life in Northern Ireland should apply.
Going back to the events of last week, people from the European Commission were there, including the President, and there is a real urge, willingness and commitment to try to make all of this work through best endeavours on both sides of the equation. It was hinted at by lots of speakers last week, and I know the Prime Minister said when he introduced the Windsor framework at the very beginning, that it is not perfect, but we do believe that it will solve a huge number of these problems. How we engage with all these different groups and people and ensure that their views are properly listened to and reflected in how we go about our business will be the proof that demonstrates that this thing—the Windsor framework—will and can work.
Q446 Stephen Farry: Thank you for that. May I just follow up specifically on the role for the Assembly and especially the Committee within the Assembly? There are concerns, particularly in the light of discussions that we are about to have around budget, that this is a big workload, potentially from a standing start, and that there are going to be major financial constraints on that. To what extent does the Northern Ireland Office work with the Assembly authorities to ensure there is sufficient capacity, in terms of human resources and finance, both to ensure the Committee can be properly staffed and provided with expert advice and that the Northern Ireland Assembly can have a presence, for example, in Brussels to directly engage and get early warning of issues that are likely to be cropping up to the attention of the Committee, in particular?
Chris Heaton-Harris: We are well aware of that. Just to save my voice slightly, I will hand over to my permanent secretary.
Madeleine Alessandri: As you would expect, the Northern Ireland Office has been working very closely with the Assembly and its staff as we are developing and have been developing the detail of how the brake will work and how it will operate. Clearly, already, when new EU law appears, we have a very strong mission in Brussels, which is already horizon scanning across the piece about what is coming up and those mechanisms will be there. Fundamentally—again, going back to the earlier part of the conversation—until the brake is operational, these things will need to be teased out. We are working through how we can have dry runs of things before it is activated, as you would expect. All those questions that you raise around resourcing will need to work their way through as we go through that, but we have that in mind. We have not ignored that factor.
Stephen Farry: Thank you.
Q447 Sir Robert Goodwill: I would like to ask about the practicalities of moving goods between GB and NI and how the green customs lanes will operate as we implement them through the Windsor framework. Obviously, the EU has to draft its own legislation for that to work. Are they keeping us posted as to how that is going? What is the timeframe for that being published and when are we likely to see that up and ready to go?
Chris Heaton-Harris: Lots of it has been adopted already.
Mark Davies: Various bits of it are already making their way through. You will have seen that we have published an explanatory memorandum to Parliament on the SPS proposals. Various elements are in the Joint Committee decision adopted on 24 March as far as the movement of goods is concerned. There will be various other proposals that fly forward. Some of that is for the Commission, but we have in mind that these things need to be in place in time for us to be able to give effect to these new arrangements. It is very much on track to be able to do that. As the Secretary of State says, many of these things are already published and already making their way through the process. For others that will emerge, they were obviously part of the process of discussion with the EU in terms of what they would cover, the arrangements they set out and that framework, collectively, is what is set out in the Command Paper. So we are confident. We know from our engagement and the work we are doing with the EU that the various things that need to fall into place to make this operate are on track to be in place on both sides.
Q448 Sir Robert Goodwill: That is good news. Following on from that, we will have to demonstrate, presumably, to the EU that we can actually comply with the filtering mechanism or the choices that need to be made. Is that something that will take time, or will it be suck it and see? That is, let us see how it will work in practice and they may well pull us up and say that we are putting too much stuff in the green lane. Is it going to be a case of just seeing how it works in practice or will there be some quite rigid rules and protocols that say, “This is in the green lane, this has to be in the red lane”?
Mark Davies: How it should operate is on the basis of the legal text. The operational arrangements—that is, how it is administered in practice—are very much a matter for UK authorities, but as you say, there are various provisions in these agreements to ensure that we can provide assurance to the EU. Data sharing is one element, but there are other elements where we are showing that we are managing this in line with the conditions that we collectively agreed were the right ones to balance smooth flow of internal UK trade, while ensuring goods destined for the EU are being checked properly subject to the processes that they should be. A complex series of things is set out in there, but in practice, as you say, with some of it we will roll these things out and there will be an ongoing process of dialogue.
Quite an important part of the Windsor framework overall is that we are now in the set-up where the relationship is there to discuss and use the structures of the withdrawal agreement to consider how these things are operating and to work through issues through those forums. That is opposed to some of the relationships that we saw over the course of the past two years, where we saw litigation on both sides or whatever. I think it is a balance, but I think that you are completely right that we have the relationship and the basis now to almost operate that in a way in which there is the scope for dialogue and working things through, rather than it being rigid or causing difficulties for every stage.
Chris Heaton-Harris: The Committee might recall that—I’m almost certainly going to get the date wrong so I will just say in January, but it might have been in early February—we published a joint statement with the Commission, in which the Commission essentially accepted that the way that we would exchange data is something that they would completely trust. There has been live testing of the system behind the green lane/red lane operation for quite some time, so we are looking forward to demonstrating again that it does what it says it is going to do.
Q449 Sir Robert Goodwill: Will an impact assessment be published regarding the cost that businesses will have to carry to comply with their green lane qualification criteria? We could then take a view as to whether that in itself is a barrier to a small company exporting small volumes of products to Northern Ireland. Even though they can get in the green lane, they may have to comply with some quite onerous processes that they are probably not used to.
Chris Heaton-Harris: I am not convinced that the processes for going through the green lane will be onerous. Actually, I think that they will be quite straightforward. The agreement establishes a new UK internal trade scheme based on commercial data sharing—not international customs processes—for the movement of goods. It will significantly expand the range of businesses that can benefit from this, end the requirements for traders to provide the customs commodity codes for each movement, scrap what we were told by pretty much every business was unbelievably burdensome and did stop people, including the supplementary declarations, and ensure that businesses can move their goods to Northern Ireland using the same sort of commercial information that they hold when they move goods to the Isle of Wight.
Traders are already using this UK trader scheme and they will—if they want to—be auto-enrolled into the new internal market scheme, and it will be unbelievably straightforward for new people to sign up. Just on the word onerous, I would say that it will not be onerous in the slightest.
Q450 Sir Robert Goodwill: Okay. Will we be able to see data on a sort of monthly basis as to the proportion of goods that are in the green lane? Then, as more people get used to the not-too-onerous paperwork that they have to do, we could see that they get into the scheme and could actually take a judgment as to what proportion—maybe by value or by tonnage—is actually in the green lane, month on month.
Chris Heaton-Harris: I am sure that we will be able to demonstrate those sorts of values in some way, because we will hold that data. I am not sure whether we will publish it monthly, but I am quite sure that we will be able to demonstrate what is going through the green lane.
Q451 Sir Robert Goodwill: Is it the case that you have to be in the trusted trader scheme to get in the green lane? Is that a prerequisite?
Chris Heaton-Harris: Yes, that is right.
Mark Davies: Yes. As is the case now, you have to show a variety of things, but those are things like, “I don’t have a serious criminal history as far as compliance with these things are concerned,” or “I can show the goods I’m moving and have the ability to show that they’re not moving on into the EU.” Those are not conditions that block people from entering, and, as the Secretary of State said, are not considerably onerous.
We have also significantly expanded the range of people who can be part of the scheme. In terms of the agrifood elements, where previously we had a list that had been static since the beginning of 2021, we can now bring in more wholesalers, such as people providing food to schools and hospitals.
When it comes to the sort of broader movement of goods outside of agrifood, there has been a sense that that is somehow restricted to retail. It is certainly not. We have expanded it to a broader range of people who are involved in processing, and we have expanded the turnover thresholds where you can be involved where that is the case. There is a retail focus for the agrifood elements because that was the feedback from business, so that the diary and meat-processing industries were not affected and their full access to the EU market was protected, which we have done.
More broadly, it is about where you can show that your goods are sold, consumed or used in Northern Ireland. Where you can do that, where you can demonstrate that you do not have a bad compliance track record, you can be in the scheme and you can move your goods in line with the new processes. As the Secretary of State said, we think that will deliver a smooth flow of trade for those who are moving goods through the green lane.
Chris Heaton-Harris: On SPS and agrifood, pre this, under the Northern Ireland protocol, there was the threat of having to have up to 500 certificates for a single truck of goods coming across from GB to NI. That is now replaced by a single document that confirms that the goods are staying in Northern Ireland and are moved in line with the terms of what we have just said. That document will be electronically and remotely processed, without the need to be checked physically.
Q452 Sir Robert Goodwill: I am told by my friends—you will not be disappointed, Chair—at Kilkeel Seafoods—
Chair: Oh no! Order!
Sir Robert Goodwill: Kilkeel Seafoods move langoustines from Scotland and ones caught in Northern Ireland, landed in the constituency of my friend from Strangford, in Portavogie and Kilkeel. My friends tell me that, although the scampi themselves will be okay, because they are in a closed loop and come back to Whitby to have the breadcrumbs put on them, the shells go into the fishfood business, which can cross the border. They have been told that they will not be able to participate because of the shells, even though all the scampi have been caught in basically the same ocean. Is there any way to look at specific instances such as that which seem to be ridiculous and anomalous—[Interruption.]
Chris Heaton-Harris: Actually, there are important specific instances, and I think that there are ways we can—
Chair: There is a very long-running joke in this Committee about Sir Robert’s unhealthy obsession with scampi. He will, I am sure, be able to seek some sort of help.
Mark Davies: It is worthwhile to take the case away. We will be doing a lot of engagement with business on some of the SPS stuff. A lot is already under way, and it is beginning in other parts. We completely recognise the need to work with businesses as we put this in place. The two messages from where I worked previously with business to help them understand the arrangements were very much focused on that, to ensure that there is appropriate time to bed in things that are new, so that they can work effectively. We are focused on that. I am afraid that scampi shell might be beyond my particular ken of understanding, but we are very interested in taking it up—
Chair: Don’t open a lacuna of information—he will fill it.
Q453 Sir Robert Goodwill: So, there will be specific rules for animal and plant management—
Chris Heaton-Harris: On your specific case, if you write to me, I look forward to investigating more about shells.
Q454 Sir Robert Goodwill: Thank you. Let us pick something at random: Wensleydale cheese—whether onerous or not, what additional compliance will I have to do to get my cheese on to the shelf in Northern Ireland?
Chris Heaton-Harris: Hopefully, not much is the answer. Invariably, they will be supplying a supermarket or a wholesaler—a retailer, indeed—so it would be a matter of whether they choose to go into the trusted trader scheme or whether they use the retailer or whoever is buying. Then I think it is 21 fields that are basically—
Mark Davies: From the agrifood perspective, that is exactly as the Secretary of State said—that is your single certificate. It is about the lorry-worth, not your individual Wensleydale cheese. If they have a contract with a supermarket, they will put hundreds of items on a lorry and there will be a single certificate saying that the load conforms with the scheme, which means that where even under the current grace periods you have sausages that have their own certificates, and there are various things for wine, organics and marketing standards, that is all then in a single certificate, which is in accord with UK food-and-drink safety standards, which means that if your Wensleydale cheese is on the shelf here in GB, it can go on there too. In that respect, it is very much simplifying down what is there and ensuring that it is a resilient supply chain.
Q455 Sir Robert Goodwill: Will they have to meet the “not at risk” criterion? Would it matter much if some of that cheese crossed the border?
Mark Davies: If you are there, you are putting it on a shelf in Northern Ireland to be sold or consumed by consumers in Northern Ireland, then that will meet the conditions of the scheme. If you are a supermarket and moving stuff into a retail store, you will be in the green lane for agrifood and will be able to move it in the green lane for the other purposes as well.
Chris Heaton-Harris: They do not have to worry if someone goes into a retailer and buys all the Wensleydale cheese that's on display to make sandwiches down in Dublin.
Sir Robert Goodwill: Thank you, Chair.
Chair: The pleasure is all ours, Sir Robert. Carla, you indicated.
Q456 Carla Lockhart: On the green lane side of things, last week the hauliers raised very deep concerns about the operational realities on the ground with the House of Lords Protocol on Ireland/Northern Ireland Sub-Committee. Does the Secretary of State recognise that many lorries crossing the Irish sea will carry mixed goods and loads, and subsequently it will be extremely challenging, if not impossible, for a haulier to declare that every item is destined for sale in Northern Ireland?
You speak of a single certificate like it is a very simple process, but can you explain it? My understanding is that it will have 21 days, it will be subject to 100% checks, and 5% to 10% of those checks will have to take place at the border post between Great Britain and Northern Ireland. If the hauliers are saying that it is not working, that it is not going to work and will cost a significant amount of money, how can you then tell the public and spin it to the people of Northern Ireland that the Windsor framework will sort out all the problems that have gone before?
Chris Heaton-Harris: Some hauliers have also said that this system almost goes back to the pre-Brexit days of ease of moving things across from GB to NI. The document that I was talking about is the single document that confirms goods are going to stay in Northern Ireland and are moved in line with the terms of our internal market scheme. They are electronically and remotely processed without being physically checked. There will be no need for official veterinarians or plant inspectors on site in supermarket distribution centres, or costly attestation supporting documents for products, or proportionate arrangements for competent authority oversight based on risk.
It is a massive simplification of current process, and it is also a massive simplification of where it would have got to had the full protocol been implemented. I do understand that we need to talk to some hauliers more so that they get to work out exactly what they need to do, and this is a process that will take time. That is why we are trying to take time to make sure that all these systems that we are setting up work. The proof will be in the pudding.
Mark Davies: No one underestimates the complexity of how groupage operates. That is, as the Secretary of State says, a very important area for work with those operators. But there are a few things in there. On the way that the green lane will operate, there will be a lot of interaction with IT systems that determines whether the consignment—there may be many consignments on a truck—is subject to the reduced process requirements and does not have to pay tariffs et cetera. It is not the case that if the entirety of a truck is not made up of green lane products, the entire thing is subject to EU process. That is not how it will operate, though obviously businesses will want to consider their own business models in those respects.
We have also expanded. There are a few who can qualify to move their goods in the green lane. For all those goods, you will have the benefit and the support of the trader support service and a free-to-use service there. There are various things that we have done in the agreement to benefit groupage. Distribution hubs can be used as part of the agrifood retail scheme. But I would underline some of those points on checks. They are not what is represented in the agreement. For green lane goods, there will be no full checks on anything. The checks are at the UK’s discretion based on risk and intelligence. There are not set and prescribed levels of physical checks on the agrifood side or on the broader movement of goods side. On the 5% to 10% thing that we are talking about, those are currently at 100% on all consignments. That will move down by 90% when the first tranche of the agrifood thing comes in, and by 95% by the end of it. So those are very significant reductions on what is happening at the moment. But as I say, I don't want to underestimate by any stretch the complexity and the need to work through these arrangements for some of the specific situations we are talking about. Hauliers involved in groupage are definitely one of those, and that’s an important part of the process as we take it forward. But as I said, these aren’t things that we are going to put in place before we have provided time to work things through, provided the appropriate guidance on how it operates and engaged with industry as we do so. So that is very much at the forefront of our mind.
Chris Heaton-Harris: All the way through this process I engaged with hauliers and logistics companies. I think I’m certainly the one person in this room who has, in a former life, used groupage—well, Sir Robert Goodwill may well have done. I used to import and wholesale fruit and veg for a living. It's not a massive qualification for being a Member of Parliament or a Secretary of State, but I do understand exactly how groupage works on freight, and I used different import mechanisms back in the day.
Q457 Chair: Is Daventry in your constituency?
Chris Heaton-Harris: Daventry is my constituency.
Chair: I know Daventry is your constituency, but I’m talking about the—
Chris Heaton-Harris: Daventry International Rail Freight Terminal sits within my constituency, so I have spent a lot of time there. When I was a Member of the European Parliament, I was the rapporteur for the EU customs code. I have a long-standing interest in this area. Like Mr Davies, I do not underestimate how—I understand that hauliers and freight forwarders want as little to do as possible; their job is to move things from A to B. But there have been elements of paperwork that have existed with movement of certainly SPS and agrifoods going back way before all this came about, and there will continue to be as we move forward. Actually, this place and probably all of us have helped legislate in some areas to try to up the quality of what we do in the United Kingdom.
Q458 Carla Lockhart: Secretary of State, I go back to and I appreciate Mark's views, because I think they are much more in tune with and much more recognising of the problems that hauliers are going to face. Hauliers keep our country going; they are the backbone. If hauliers were to take to the streets tomorrow in protest and cease their haulage, our country would grind to a halt. And ultimately, what these hauliers are telling us—I really think it is very, very foolish of you, Secretary of State, to dismiss those hauliers who have 30 or 40 years of experience in the industry, bringing their concerns to the House of Lords Sub-Committee last week. To dismiss those is very foolish. I strongly recommend that we and you and your good Office engage immediately with those people, because ultimately those are the people who are going to have to carry this out and they are telling us that this is going to cost a significant amount of money. It is virtually impossible to interpret and to actually work through the groupage issue. So I think it's important that the message today—Mark has basically confirmed it—is that there is a problem and the Windsor framework has not fixed it.
Mark Davies: I am not sure that was the intent of what I was conveying. The issues that were raised with us by businesses, including hauliers, were some of the burdens in terms of the processes that were faced, the range of goods that were facing duties, and some of the issues with supplementary declarations for all goods. The position as it has been for the last two years is that every single good moving from Great Britain to Northern Ireland has been subject to the same process in terms of the movement of goods and the paperwork. There has been no differentiation between whether a good is staying in Northern Ireland or not. That is fundamentally changed as a result of the Windsor framework and means that goods staying in Northern Ireland are subject to a radically different process—with far less process, with fewer checks and with no need to pay duties. Those are all things that are designed to address those issues that people were concerned about. But what I have said is that they are also carrying goods that are moving on into Ireland and beyond. Groupage is a complicated sector and, exactly as we have said, we want to make sure we engage with the sector. We want to make sure the guidance is clear so that interpreting how this works is clear. The changes that we have made are designed to very much simplify the movement of goods and ensure the smooth flow of trade for things that are moving within the UK. As you say, the proof is in the pudding, but from negotiating it, and from having listened to some of the feedback on the issues that we were looking to address, we very much hope that that is what we have done. That is what we believe that we have done through the framework.
Chris Heaton-Harris: And we continue. Forgive me, but I did not dismiss that evidence. In fact, quite the reverse. I was saying that I understand the industry, and I have been talking to it since I became Secretary of State for Northern Ireland. Through the Brexit working group that business and the CBI set up in in Northern Ireland, we continue that engagement. It continued last week with the chair of the Brexit working group, who wants to make sure that we have the granularity in the detail that answers the questions that you put. I am very aware, and indeed in the days before getting the framework over the line, when there was a glide path to it, I actually met the Road Haulage Association and Logistics UK to go through what the requirements were now, what their asks were, and where they would like to get to. I would like to think that we have answered lots of those questions.
Q459 Jim Shannon: The proof of the pudding has to be the issue. Last weekend in the News Letter, a haulier from Randalstown was quoted as saying: “The notion of a red and green lane is very binary. As far as haulage is concerned, there is no green lane between GB and Northern Ireland—none whatsoever. The only green lane is actually between the EU and Northern Ireland via the Republic.” That is the reality for him. He also said that “in many cases, it could mean the business asking ‘can I actually do this work’. It could ultimately come to, ‘can I actually survive’.” On the proof of the pudding, Mark, to use your words and to quote the Secretary of State, whatever engagement you have had is quite clearly not working, because the guys on the ground who are doing the work are looking at real problems in how it works. That guy wonders, if it goes on much longer, whether he can “actually survive”. Those are his words. If they cannot survive, we have a big problem in Northern Ireland, because we need the logistics to get products in and out of Northern Ireland.
Mark Davies: I have absolutely no doubt whatsoever of the importance of the haulage industry, but as I say we are starting from a base where, unlike in a number of other areas, we were dealing with various grace periods. In terms of the movement of goods, we have had full international third-country processes applying to movements, regardless of where they are ending up. This changes that for goods that are staying within the UK. That is very much responding to the concerns that were raised about the burdens of supplementary declarations for those movements, and the burdens of having to provide a commodity code every time those goods move. Those are things that we have looked at and addressed, and we have expanded the range of people who can benefit from the green lane.
We have made sure that the process for getting in is, as the Secretary of State said, straightforward. We will be rolling over people who are already part of the scheme that has been in place. We are bringing forward a tariff reimbursement scheme for those who, for whatever reason, may still be subject to duty. These are concerns that we have heard and listened to on the movement of steel. We have dealt with those issues. In the engagement that the Secretary of State and various other Ministers have done, these are things that we have looked to address, and we will very much want to work with industry. I should be very clear that these things are not in force yet. We have not brought forward the various instruments that give them effect. We have not set out the guidance. As we do that, we want to work very closely with industry to do it.
Carla Lockhart: Chair—
Chair: No, I want to make some progress. I am conscious of time, and we have not even started on the public finances. Mary Kelly Foy.
Q460 Mary Kelly Foy: Thanks, Chair. I will continue a little longer with the Windsor framework. In the Command Paper, the Government say that they have preserved their commitment to ensure that Northern Ireland’s businesses will have full, unconditional and unfettered access to their most important market in Great Britain, and at the same time maintain access to the EU market. They rightly recognised that that involves a delicate balance for how the EU protects its internal markets. How will the Government monitor potential divergence between UK and EU rules that will have particular significance for people, businesses and public authorities in Northern Ireland? What work is being done to strengthen co-operation with the Irish Government on market surveillance to avoid risks to the EU’s single market?
Chris Heaton-Harris: Essentially, your question is about European scrutiny. As you know, the European Scrutiny Committee still exists to this day in this place, and my permanent secretary outlined the sort of behaviours that we will be undertaking as we move forward. Essentially, the UK Government do monitor what goes on in the European Union anyway, just as the European Union monitors what goes on in the United Kingdom anyway. An important part of our trade and co-operation agreement is to understand both markets. What we will be doing is hopefully sharing some of that knowledge and expertise when Stormont gets back, so the MLAs can also do what they need to do to monitor future regulation and EU law.
We are not having to construct things from ground zero; we have processes that already exist. The number of explanatory memoranda flying around Whitehall about various EU regulations is quite something. If you wanted, I am sure that the Chair of the European Scrutiny Committee would take you through them in great detail. So these processes do already exist, and the Joint Committee is there so that we can work out early where there might be an issue coming forward. We can then have a conversation about it to work out what we need to do to plan for said divergence, or how we can work together on that divergence. A process rather than a straightforward, black-and-white answer will be the end point with this.
Mark Davies: Mr Farry was asking this question earlier. Some of the new groups and bodies that the Windsor framework envisages are very much about that spirit of finding better means of engaging and that dialogue being upstream, so that we understand the implications and can actually respond to them. How they can support the kind of monitoring and foresight that you are describing was very much at the forefront of our minds as we set them up.
Q461 Mary Kelly Foy: And on work together with the Irish Government?
Chris Heaton-Harris: Yes, the Irish Government are obviously a member state of the European Union, so a lot of this is done at an EU level, but we will hopefully continue to build and enhance our relationship with the Irish Government. If they want to talk about these things, I am sure that would be welcome.
Mark Davies: Some of the declarations that are part of the framework talk about how that will be important and relevant as these things go on stream and as there is increasing divergence between different areas, and between Northern Ireland and Ireland. That is an important part of embedding these new arrangements as we bring these things on stream.
Mary Kelly Foy: Thank you.
Q462 Chair: A final question on the framework. Some subsidies can be provided at a stroke under the Windsor framework without having to seek EU approval. What are they?
Chris Heaton-Harris: It depends on Government policy in any particular area.
Q463 Chair: So it is the whole range, without reference back?
Chris Heaton-Harris: Essentially what we are saying is that the common agricultural policy and the common fisheries policy no longer apply to Northern Ireland, so the subsidy regimes that we have in place—[Interruption.]
Chair: I am sorry, Secretary of State. Colleagues, there are now two lots of private conversations going on. The Secretary of State has a cold; he is not feeling great.
Mark Davies: The changes are about there being a much stronger materiality test. So where aid is concerned, what is the size of the subsidy concerned and the size of the undertaking receiving its market presence in Northern Ireland? It is not just a hypothetical theory that a business may one day trade with Northern Ireland; it is very much constrained around the real-world impact. By virtue of those things about the size and nature of the undertaking, that sweeps away the vast majority of things where you would need to have recourse or regard to the provisions of the framework in that respect.
Q464 Chair: Okay, thank you. I think we have had a good canter round, through and about the Windsor framework.
We are going to turn to public finances now, which are obviously a huge concern to a vast number of people in Northern Ireland, particularly those across all communities who look to the public sector and public services for such a lot of their life support.
In the media this morning, Secretary of State, a projected freeze on new build in education is reported for financial year 2023-24—I am slightly paraphrasing. Given the desirability of integrated education, that is not a good thing, is it?
Chris Heaton-Harris: If I may, I will go into the detail in a moment, but I would just frame the conversation, which I think is genuinely important, by saying that Northern Ireland’s public finances are currently not on a sustainable footing.
The necessary strategic decisions have not been taken over a long period of time. For four out of the past six years, Northern Ireland has been without its locally elected representatives and, what we’re seeing now, essentially, are the implications of that.
On the pressures in this financial year, on 28 October last year, when Ministers fell away and the last remnants of the Executive disappeared, a couple of weeks before that, the Minister of Finance described to me as Secretary of State a £660 million black hole in Northern Ireland finances.
I want to pay huge compliments to the permanent secretaries and the civil service in Northern Ireland for the work they did with Mr Perry and his team to try and understand the finances of Northern Ireland and get some granular detail on what can be quite an opaque system.
Working with the permanent secretaries, we then got it down to a gap of £297 million, within year. That is still a big gap in an in-year budget.
Some 90% of Northern Ireland’s finances comes from the block grant. The vast majority of the other 10% comes from the regional rate. So you can see where the income is and what the income equals, and then you have the ongoing spending commitment.
So that is why. Over years, sometimes budgets haven’t been set, and sometimes policy priorities haven’t been set. I can't remember when the last plan for government was.
Madeleine Alessandri: 2016.
Chris Heaton-Harris: 2016 was the last plan for government in Northern Ireland.
Stephen Farry: It was a draft.
Chris Heaton-Harris: And that was a draft? There have been issues that have gradually built us up to this point.
Q465 Chair: There is a presumption for that perfectly understandable drive for parity—if each community needs it, you spend 50p there and you spend 50p there. Does that mean that the bean counters, the financial managers, just find it very difficult to say no?
Chris Heaton-Harris: No. I honestly don't know all the reasons behind how we’ve got to this point. What I’ve been trying to do in the NIO, working with the permanent secretaries of the different Departments, is to actually get into some granular detail as to how much money is going out, and what are the statutory obligations of the various Departments in Northern Ireland.
Now, I don’t have any power to influence spending decisions at all. All I can do is actually set a budget and give guidance. We’ve given guidance to the permanent secretaries as to roughly how they can spend it. That is why it is fundamentally important to get the Executive up and running again. Any decisions in this space in a devolved Government should be made by locally elected politicians, for the people who elect them. I can completely understand why permanent secretaries feel uncomfortable making choices—that’s not their job. Their job is to implement policy set by locally elected politicians, but there has been a massive void in that space.
Q466 Claire Hanna: It is going to take longer than we have today to discuss all the reasons for the state of the public finances. While there is obviously a cost to division, it is not the real reason. To my mind, the primary problem is the instability of governance, and the fact that we are all just recovering from the last collapse. You will know that a huge amount of that spend—I think it has tipped over 50%—is in health. It is in a substantial part due to the failure to enact some of the reforms. It is much more complicated than that, but it is important that we do not lean in too much to this narrative about profligate and irresponsible Ministers. You mentioned the projected overspend of £660 million, which got a lot of airing, including in communications from the NIO. I just wanted to understand how that was revised down to £297 million. What accounts in the main for the gap between those figures?
Chris Heaton-Harris: Lots of it, actually, you could say is down to simple clarity of spending and no guesstimates.
Colin Perry: I do not think that I would point to anything specific, but I think that when there were no Ministers in place and we talked to all the permanent secretaries—we did talk to each and every Department in the Northern Ireland civil service system—we discussed the really serious situation of the finances. The £660 million was put out by the Finance Minister, as the Secretary of State said. It is also worth noting that the Fiscal Council talked during the earlier part of 2022-23 about how some Ministers had continued to make funding commitments at the same time as indicating that they were going to overspend. There were challenges, but the clarity that came allowed them to work out—and it was for them to work it out, because the Secretary of State was very clear that he does not have that power—where they could bring that spending back. That allowed us to bring it back from £660 million down to £297 million, but we were not able to bring it back to getting the budget to balance. That is why we have ended up having to carry forward some funding.
Chris Heaton-Harris: Yes.
Q468 Claire Hanna: And what has the response been?
Chris Heaton-Harris: We are still talking to the Treasury at this point in time.
Q469 Claire Hanna: I hope that you, as our advocate, will make the point. I think that we have all seen over the last decade and a bit that austerity is the prioritising of paying down debt over every single other outcome, and it has been damaging. Simon spoke about those who rely on public services. I think that is the vast majority of people in Northern Ireland, through health, education and infrastructure. I do not think that there is a particularly good reason that all that pain and payment needs to be felt up front. Colleagues are going to pick up on the necessity of putting finances on a more sustainable footing. When do you intend to bring forward a budget if Stormont is not returned?
Chris Heaton-Harris: As soon as I possibly can.
Q470 Claire Hanna: And what is the latest you will allow things to go without a budget being set?
Chris Heaton-Harris: There are still ongoing conversations that I need to finish off with the Treasury, and maybe a couple of conversations with Departments, but as soon as I possibly can. In very short order.
Q471 Claire Hanna: Are we talking days or weeks?
Chris Heaton-Harris: Never give a timeline to anything in Northern Ireland, but in very short order.
Q472 Claire Hanna: This is one deadline that people might want you to meet. Inflation is still high, putting pressure on wages and all aspects of the public finances. How do you intend to address that shortfall in the short and medium term?
Chris Heaton-Harris: Realistically, as I said earlier, what I do is just set the total sums for the budget. It is important to set a budget. What we found last year when we started working with the permanent secretaries was that where there is a void of direction, you have spending commitments that can run out of control. That is why I am determined to set the budget in short order, to be quite frank, so that people know exactly what they have to work with and so it can be done. But the decisions within that financial envelope currently sit with the Northern Ireland civil service, within the guidance that I have given them, which is broad.
Claire Hanna: We have a lot of material to cover in terms of some of those governance issues, and I know that the Division bell is going to go sooner rather than later, so I will hand off for now.
Q473 Stephen Farry: Picking up Claire’s point about timescales, let me echo what she said about the importance of having clarification as early as possible. We are conscious that we are now one month into the financial year. Making cuts over 12 months is difficult enough; making them over 11 or 10 months is even more challenging.
I want to probe a little the approach to making our public finances in Northern Ireland more sustainable. Obviously, there are a lot of decisions in that regard that should ideally be taken by a devolved Executive. In the absence of that devolved Executive being restored in the near future, how interventionist would you see the Northern Ireland Office becoming in trying to take more proactive decisions to shape the direction on public finances?
Chris Heaton-Harris: Let’s state where we are now. Currently, I have no power in this space whatsoever. I cannot even legitimately ask the Northern Ireland civil service to commission work on what revenue raising might look like. So I would say we are a very, very long way away from the ultimate outcome of your question, but I do think that, realistically, work needs to be done, especially for when Stormont comes back, to make sure that the whole ledger can be viewed by the MLAs when they are making their decisions.
Q474 Stephen Farry: My party has been associated with being somewhat more open to revenue raising than some of my colleagues, but there is a point about how the public in Northern Ireland would receive issues being addressed purely by revenue raising while inefficiencies in existing patterns of expenditure are not addressed. It is almost like just putting more and more resource on top of an existing problem.
That takes me to my next question—and you can probably guess what I am going to say, Secretary of State, because I have raised it with you several times. I am very conscious that our public finances are on a burning platform. If we end up with a series of cuts this year, we are going to see major problems with public services and we are going to hinder our ability to grow our economy. There is a massive juxtaposition: we have had the feelgood of the past two weeks, when we have really been talking Northern Ireland up and talking about a prosperity agenda, but if we do not have quality public services and we are not able to invest in skills and infrastructure improvements, that is going to ring very hollow. We need to get our ducks in a row.
What is your current thinking on the potential for a financial package for Northern Ireland, particularly in the context where the parties in Northern Ireland collectively, alongside the civil service, were able to make a clear ask? To my mind, that would need to be very much on an invest-to-save basis that meant not simply putting more cash into an inefficient system, but recognising that there is a twin-track approach here: first, stabilising the current situation, but also enabling the Executive to make investments where they need to make investments to transform public services such as health and education to make them more efficient down the line—and, I suppose, in the medium term, to reduce Northern Ireland’s dependency on the Treasury.
What is your current thinking on that? Are you prepared to go into bat with the Treasury on our behalf, in particular if the parties can come up with a coherent package?
Chris Heaton-Harris: To start, again, on the slightly more global aspect, obviously, the institutions have not been running for quite a few years, but the latest figures for the Northern Ireland economy are not bad in the slightest; it is growing, in spite of there being no Executive. Can you imagine how dynamic and amazing it would be if there was an Executive in place that could facilitate some of the decisions that make it easier to do business in Northern Ireland, to set up, even to make planning decisions—whatever might be required?
On the revenue raising point, as you are well aware, the Northern Ireland Fiscal Council and the Fiscal Commission have published reports on the long-term sustainability of public services and public finances in Northern Ireland, and a common theme is the need for political leaders to tackle the systemic issues that are facing the public sector in Northern Ireland and for strategic leadership to establish them on a sustainable long-term footing, including the consideration of revenue-raising powers.
I think I have met nearly all the elected Members of the Legislative Assembly, and I know there are plenty of amazing-quality elected folk who are willing to step up and take these decisions. I know, because we have been working with the permanent secretaries and the civil service of Northern Ireland, that the civil service is a high-quality civil service that has responded to quite significant challenge. But I am also aware that there have been plenty of reports—the Bengoa report on the transformation of the health service, for example—that have not been taken forward.
I want to be the cheerleader for a proper, dynamic transformation of public services in a good direction in Northern Ireland, but it does need that plan to come together, and I do not want to put the cart before the horse in that space. [Interruption.]
Sitting suspended for Divisions in the House.
On resuming—
Chair: Welcome back. Mr Farry, the floor was yours.
Q475 Stephen Farry: Thank you, Chair. In your last answer, Secretary of State, you talked about recognising the importance of systemic change. I want to raise with you the dangers of more short-termism if we end up in a difficult situation where permanent secretaries are making cuts. In education, for example, there seems to be a pattern whereby permanent secretaries protect statutory services first and foremost, and the areas that seem to be most prone to being cut are those where there is more discretion. Those tend to be areas based on early intervention and prevention—things that create longer-term benefits for society and allow for restructuring. Early years intervention, supporting vulnerable children and—more broadly, outside education—public health and tackling economic inactivity are all areas that there perhaps is not a legal duty to fund, but they allow us to transform the way that Northern Ireland does things. Do you recognise the danger of that perverse outcome coming from the current situation?
Chris Heaton-Harris: I recognise the concerns, most certainly, and I have spoken to lots of people about the various concerns. There are different concerns in different parts of each area in the budget. As I say, I do not have any power to direct the civil service to take any decisions at all. The law allows me to set the budget, which I am keen to do this year. Until the point at which I did it last year, it did not exist, which explains quite a lot of the wayward figures. The permanent secretaries in each of the nine Departments are accounting officers in their own right; they have to remind themselves, each time they look at these things, how to look after public money and their accounting officer duties.
As I say, I do not deny that this is a difficult place. That is why it is more important than ever for the institution to return, so that politicians who are elected to take these decisions can take them.
Stephen Farry: I fully concur with your point about a structure, and the need for a plan. I suspect that there should be some degree of a package between a restored Executive and the UK Government, albeit with a lot of conditions, so that we can gently transform Northern Ireland once and for all.
Q476 Chair: Northern Ireland has the worst hospital waiting lists in the UK; education leaders believe that education funding is in crisis; and from the Chief Constable down, there are significant concerns about the PSNI budget, and difficulty making decisions about the protection of neighbourhood policing versus other forms of policing. How concerned are you about the delivery of public services in Northern Ireland and the potential impacts?
Chris Heaton-Harris: I was concerned about the state of public finances in general when the powers first fell on my shoulders—or when the Ministers left their Departments. Without coherent public finances, you cannot afford to pay for any of the items that you have outlined, nor a whole host of other things.
I talked to people in the margins of Queen’s University last week, as I’m sure you did, Chair, when you were around. On just about every item that you listed, representatives in the audience were keen to emphasise their issues with what they believe will be their budget envelope. However, as I say, I literally have no legal power with which to step in.
Q477 Chair: I appreciate that. Clearly, difficult, politically challenging decisions will have to be taken. Do you worry that some would prefer you to take those decisions, so that they can then say, “I’ve got to play the hand of cards I’ve been dealt”, rather than choosing the hand of cards themselves?
Chris Heaton-Harris: No. Actually, I truly believe that people of all political persuasions in Northern Ireland want their locally democratically elected MLAs to take those decisions. We just need to get over this bump in the road so that can happen. I do not think there is a push to say, “Oh, let the Secretary of State absorb this.”
Q478 Chair: In broad terms, for every pound that is spent on a constituent in Daventry or in North Dorset, about £1.20 gets spent on a citizen in Northern Ireland. A significant sum of money was provided through a confidence and supply arrangement; there is block grant; there was new money in New Decade, New Approach, and so on. How does one turn around the complacency—not yours, but locally—about deficit? If there is always a presumption that Westminster will find the cheque book, or someone will scrabble around and find a bit of loose change behind the sofa to fill another black hole, there is no incentive to modernise and change, is there?
Chris Heaton-Harris: I am quickly scanning through my mind, thinking of who I have met. I think I have met the finance spokespeople of all the main political parties and the main party of Opposition in recent days, and there is no lack of enthusiasm, knowledge or ability among those people when it comes to taking those decisions. As Mr Farry outlined, there is a need for a plan to come together. The basis of Northern Ireland politics is consensus, which is another thing we talked about earlier. I have regular meetings with the party leaders; people here have been at those meetings. I believe that there is the ability, will and understanding of the public finances necessary for us to come together with a plan for transformation. I am not worried particularly about the abilities, or where they lay. We just need an Executive up and running to start the process.
Chair: Thank you. Stephen, we are back to you.
Q479 Stephen Farry: I want to drill down into an issue that has caused a fair degree of controversy in recent weeks: the allocations from the shared prosperity fund. I appreciate that there was a little extra money in the final weeks, but there was a lot of concern in the community and voluntary sector that decisions were taken right down to the wire. There also seems to be some concern about the equity of the outcome, particularly in the women’s sector, which feels that it has been underfunded, compared to what happened in equivalent rounds of the European social fund. Notably, the Kilcooley women’s centre in my constituency missed out, which was somewhat surprising. Perhaps you will respond with your thoughts on how that worked out at the end, and what plans there are to pick up on underfunded areas that are struggling, given that they are important to addressing economic inactivity, which is a key structural problem in Northern Ireland.
Chris Heaton-Harris: The overall picture is that there is £2.6 billion in the UK shared prosperity fund. It is the central pillar of the Government’s ambitious levelling-up agenda and a significant component of Government support for places across the UK. In 2022-23 to 2024-25, Northern Ireland was allocated £127 million to invest in domestic priorities; it could target the funding where it was most needed.
The Northern Ireland investment plan, which was announced at the end of last year, details how the allocation goes, but the fund helps places right across Northern Ireland to achieve outcomes. The basic aims are to support local businesses and entrepreneurs, so that they can innovate, thrive and grow, and essentially to unleash the potential of the private sector; to support the individuals furthest from the labour market by moving them into work with the right skills, so a huge piece of that is the skills agenda; and to invest in the places where people live, because as you know, it is unbelievably important in Northern Ireland to give a sense of community, local pride and belonging.
The Department for Levelling Up, Housing and Communities announced the outcomes of the competition on 31 March, and agreed to commit £57.5 million over the next two years. That is actually in excess of the £42 million that was set out in December. Eighteen projects were selected by Ministers in the Department, and 17 lead applicants collectively worked with 80 organisations to deliver support across all 11 council areas in Northern Ireland, on a wide range of concerns.
In general terms, I think we have the broad spread of what DLUHC Ministers try to do about right, but I have met representatives of women’s organisations and others who are upset. Not everybody can win funding all the time; organisations that support women benefit from funds in all those areas, but especially in those about economic inactivity. We assess that 25,000 people right across Northern Ireland will receive help to address the barriers that effectively stop them.
Q480 Carla Lockhart: On that point, our DUP representatives in the Hollywood and Bangor area have been engaging with Kilcooley. It has been a devasting blow to that organisation, which does amazing work empowering women, and helping them to transition and upskill. That is something we all pay a lot of lip service to. Being stripped of that funding is really devastating for the group. It will have an impact on women and their potential. Will the Secretary of State agree to engage directly with some of the women’s groups that have not been funded, to hear from them? Could he do something cross-departmentally on the potential to level up in the future, through the UK shared prosperity fund or whatever it might be? We are at risk of losing the good work that has been done because of that gap. It would be really positive to send a message to women’s groups that they should keep doing what they are doing and engage further with other potential streams.
Chris Heaton-Harris: Thank you for that. I have been engaging with various women’s groups since I became Secretary of State, not least because—in a reflection of one of the first questions—I understood very well that women have been a powerful driver behind positive change in Northern Ireland for at least the last 25 years, and probably for a long time before that. I wanted to meet the people who drive our economy forward and keep everything going. I would be delighted to meet these organisations.
Carla Lockhart: I’ll write to you.
Q481 Chair: A number of us saw them in Bangor a week or so ago, and were hugely impressed. I echo what Ms Lockhart has said. The way they can assist people in transitioning to an entirely new way of life, raising families and all that, is hugely powerful. I know that the Committee would welcome anything that could be done, and would take a keen interest in it.
Secretary of State, earlier this month, the FDA trade union wrote to you, asking for an NIO Minister to provide a ministerial direction to Northern Irish civil servants, as they face having to take difficult and essentially political decisions on cuts to public services. Is that a request you are taking seriously, to help protect civil servants in Northern Ireland, who are all trying to do their best?
Chris Heaton-Harris: I take every decision that I take seriously.
Q482 Chair: And where are we on the request?
Chris Heaton-Harris: Currently, with the levels of governance that we have, I am not minded to change.
Q483 Chair: So will you provide a ministerial direction?
Chris Heaton-Harris: No, not now. I do not think it is the right thing to do, and I certainly do not have the power to do it, actually.
Q484 Stephen Farry: To clarify and amplify the Chair’s question, are you essentially saying that the Executive functions Act, which needs to be reviewed shortly, continues to be fit for purpose for civil servants taking what are, to their mind, inherently political decisions?
Chris Heaton-Harris: As I said right at the beginning, and I absolutely mean it, the civil service in Northern Ireland and the permanent secretaries have been working brilliantly to try to ensure that they live within their budgets and come in on budget with the powers we have. I currently have no powers at all to direct. The only ministerial direction that could be given would be by a Minister in the appropriate Department in the Executive. I literally do not have that power, and there would be other ramifications of taking that power, which, on the wider political scale, would need a huge amount of debate and contemplation.
On the Executive powers, I am still talking to my colleagues within Government, but so far, I know it has been uncomfortable for the permanent secretaries within their Departments, but I also know they have been doing the best job they possibly can. I think it is probably the budget decision and the level of the budget that is the key factor in this.
Q485 Stephen Farry: I fully accept what you are saying around the wider ramifications of any decision that would be taken in that regard. The other side of the coin is that there is a growing crisis here in that what is now being asked of the civil service is a significant step change from what has been the case over the previous number of months. I do not want to name anyone, but I know from conversations that there is a growing unease—I could maybe put it slightly stronger than that, but I will just say unease—at the prospect of taking those decisions in the current governance structures.
Chris Heaton-Harris: I understand that, but equally there is that bigger political picture and all the issues if I were to go down the route of taking primary legislation through this place, taking a power and getting involved in that way. These are very big steps and they open up a wider debate about governance. If we are going to go down that route, we want to do it eyes wide open and not in a reactionary way.
Stephen Farry: I fully accept that.
Chris Heaton-Harris: I don’t want to go down that route.
Stephen Farry: We are in a perfect storm of a dilemma, but I appreciate the answer.
Q486 Claire Hanna: We have heard that spending reviews being superseded by the budgets that follow them, or changes in UK Government priorities, impact Northern Ireland and do not allow for long-term strategic policymaking. How do you respond to that?
Chris Heaton-Harris: I would love to be in a position where Northern Ireland has an Executive that is up and running and that sets a multi-year budget that allows people to plan and reform to take place. I think that is within the hands of the politicians in Northern Ireland.
Q487 Claire Hanna: As part of our inquiry, we have had evidence from NERI that the way Northern Ireland receives its funding is problematic—as well as how it allocates it itself—for longer-term planning because of the “use it or lose it” basis of allocations from the Treasury. Do you recognise that as an issue?
Chris Heaton-Harris: I am not sure I have been in place for long enough to recognise the trait. Colin, would you like to answer?
Colin Perry: I think it is the way that public finances operate more broadly, as I know you know. This is the way public finances work right across the UK Government. It is based on a system that allows Governments to make decisions, and it conforms with the political cycle. As the Secretary of State said, in the UK Government system, we will generally operate on a multi-year basis—the recent spending review was a multi-year settlement—but that has rarely been possible in Northern Ireland. I suggest it is the need for a multi-year settlement that is really important here. I think what they are picking up is a consequential of the lack of a multi-year budget.
Claire Hanna: It feeds into everything that we were discussing—the reforms not working their way through, and the double running that is dragging down the budget in other ways. It is good that that is on your radar.
Q488 Chair: Secretary of State, we have heard from a number of voluntary organisations that are doing the real groundwork in communities. I am not just saying this because you are all from the Department, but there is no criticism whatsoever of what the NIO does when it has agreed funding for a particular project or group; the group knows that the funding is coming, and gets it in a timely fashion. However, so many people are sitting thinking about issuing notices for unemployment, and all the rest of it, because they just do not know whether their Stormont section of money will come through, and certainly not for multi-year agreements.
We can have a to and fro on the process, and on the whys and wherefores, but is not one of the great tragedies that very often the communities affected have deep-rooted suspicions of the state and its efficacy? Often, these organisations are the bridgeheads from one way of life to another. If a service gets interrupted, people fall back into their comfort zone, and will be far more reluctant to come out of it next time. They say, “Well, you've slightly walked me down this path, and then all the services I became reliant on were suddenly pulled from under me. Why should I trust you again?” This is not just a financial management thing. Not just at the margins, there is a societal risk of people stepping back, not because they want to, but because they have to.
Chris Heaton-Harris: I genuinely do not think that I have the expertise to answer that question. People currently taking part in local election campaigns in Northern Ireland will be knocking on doors, and they will be getting a fair reflection of what folk across Northern Ireland are feeling, and their priorities.
To go back to the beginning of the session and the Windsor framework, there was legitimate concern in the Unionist community about the effect of the Northern Ireland protocol on the delivery of goods, but it was more symbolic than that. There is a lack of goods coming from GB to NI, but that was a physical demonstration of Northern Ireland potentially being inadvertently pulled out of the orbit of the United Kingdom internal market, and being pulled closer into the gravitational pull of the European single market. I would like to think that we are starting to address those issues in a proper and practical way as we move forward with the Windsor framework.
I think people in Northern Ireland just want good public services, as they do in any other part of the United Kingdom. They also want someone to moan at when they do not get them. The people who should be taking the decisions on all the matters that we have talked about in this budget space are not in situ to take those decisions. There might be conditions to fulfil first, but I do not believe that anybody in this room or outside it does not want those institutions to eventually deliver those public services. The UK Government need to make sure that we answer the questions that we will hopefully get asked, and that those services stand up, so that we can go back to a point at which people across Northern Ireland get the public services that my constituents and yours expect.
Chair: Thank you. Our final question goes to Ms Lockhart.
Q489 Carla Lockhart: I have two final questions, both relating to what you have just been speaking about, Secretary of State. The first is around Northern Ireland’s finances. My colleague Gavin Robinson has been very much to the fore in highlighting the squeeze on the Barnett consequential, how that funding is distributed, and the amount of money that comes to Northern Ireland. If Stormont was back up and running in the morning, there would not be a bigger cake. Northern Ireland is at a disadvantage, because the Treasury contribution to funding public services in Northern Ireland is going down, rather than rising. For example, spending in England up to 2025 will increase by 6%, but it will increase by only 3.6% in Northern Ireland, and in the same period some £2,000 will fall from per-household public service expenditure for Northern Ireland in real terms.
The Chair talked about complacency around the deficit; I think there is a complacency around restructuring how Northern Ireland is financed. If we do not grasp that nettle and start to look at how we are being disadvantaged, Northern Ireland’s public services will be decimated within a decade. It is really important that that is taken away and taken seriously for the people of Northern Ireland.
We have suffered 30 years of conflict; whether or not we want to airbrush that and try to put it in the past, the reality is that there was no investment in our infrastructure as a result of bombs and the blowing up of our communities. All three towns in my constituency were blown to bits throughout the Troubles. That is why there is a lack of investment. For me, it is about taking a long-term look at it. Can the Secretary of State give us any indication of whether he and his officials are looking at that?
Chris Heaton-Harris: I would be willing to have a conversation about this with any Finance Minister at Stormont.
Q490 Carla Lockhart: But it is not a Stormont issue; it is a UK Government issue. At the end of the day, we are talking about the Barnett consequentials, the Barnett formula and how money is passed to Northern Ireland—the reshaping of it, the reconfiguring of it and ensuring that Northern Ireland is not disadvantaged in the way that it is being disadvantaged according to the figures from the Northern Ireland Fiscal Council. Whether or not a Finance Minister is in place, the work can be ongoing to look at this.
Chris Heaton-Harris: Yes, but I need an interlocutor on the ground to qualify and ask the questions of demand, future demand, what investment would be required, the purpose of it, whether it would be transformational, and a whole host of other things. I understand the point you are making, and Mr Perry and his team do look at all these issues in the round, but essentially you need local voices to inform that debate.
Q491 Carla Lockhart: As Secretary of State you have had your fingers over the budget, and you certainly seem to be aware of the budgetary constraints. I think it would be wise to look at why there are those budgetary constraints and the fact that if Stormont was back up and running in the morning, it could not actually do what it needs to do on the basis of the cake not getting any bigger. But you have made your point.
My final point is about an issue that was just raised, and it brings us back to the start of this conversation around trust. I have to say that I have been out on the doorstep and engaged significantly with people in my constituency and, indeed, across Northern Ireland. Unionist people do feel a real lack of trust. They feel that their concerns have been dismissed over the last number of years with the protocol and all that went before. They feel that the Windsor framework does not go far enough, for the reasons we have discussed today in respect of the green lane and the haulage industry—
Chair: Carla, sorry to interrupt—
Carla Lockhart: With due respect, I am coming to a question. The Secretary of State is in front of me and one of my constituents has asked me to ask this of the Secretary of State, so I feel obliged to ask. We have talked about the Windsor framework; it does not cut it with Unionists. They do not feel that it has done enough. I have to say that you have said that you stand—
Chris Heaton-Harris: That is not exactly what the polling says, to be fair. Only one poll has been done on these matters since the Windsor framework came in. People are more than welcome to change their mind, and I am a politician, so I do not really like to rely on a single poll—you need a trend—but what you are describing is not what that singular poll said.
Carla Lockhart: Well, it’s what the public are saying.
Chair: I’m sorry, but I am going to draw this to close. We looked at Windsor for the majority of the session. We have had a lot of time from the Secretary of State—I know he needed to go ideally a little bit before 5 and we are now a bit after 5—and I think Mr Shannon made—
Carla Lockhart: Chair, I am asking for your indulgence on one issue that has not been touched on and that is so pertinent to what one of my constituents—
Chair: It has not been touched on?
Carla Lockhart: It has not been touched on.
Chair: Well, okay, you can have an indulgence on this, but it has to be very quick. I want the question.
Q492 Carla Lockhart: It will be very quick and I really do thank you. Secretary of State, you said that you stand by every word that you said last week at the conference, and you lauded Martin McGuinness—
Chair: Can we have the question?
Carla Lockhart: Yes, the question is coming, perhaps soon—
Chair: No, I just want the question, Ms Lockhart.
Carla Lockhart: You lauded Martin McGuinness as someone who demonstrated real leadership. Would you today please apologise to the many constituents, and to my constituents who have raised this directly with me? Martin McGuinness, what part of his leadership—
Chair: Ms Lockhart, thank you. You have asked the question; let the Secretary of State answer it, please.
Chris Heaton-Harris: I guess I could quote my hon. Friend the Member of Parliament for North Antrim when he said in 2017, “we would not be where we are in Northern Ireland in terms of having stability, peace and the opportunity to rebuild our country if it hadn’t been for the work” of Martin McGuinness. I’ll leave it there.
Chair: Secretary of State, thank you very much indeed.
Before we let everybody go, I want to say to Mr Perry, on behalf of the Committee and the people of Northern Ireland, that I thank you for your long service to public service in this country and for your work in Northern Ireland. It has been appreciated and we wish you a long, healthy and happy retirement.