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A Fresh Start: the Stormont Agreement and Implementation Plan and the Northern Ireland (Welfare Reform) 2015-16 [Bill 99]

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A Fresh Start: the Stormont Agreement and Implementation Plan and the Northern Ireland (Welfare Reform) 2015-16 [Bill 99] BRIEFING PAPER Number 7389 , 20 November 2015 A Fresh Start: the Stormont By Paul Bowers, Steven Agreement and Implementation Plan Kennedy, Lizzie Parkin, and the Northern Ireland (Welfare Hazel Armstrong, Wendy Wilson Reform) Bill 2015-16 [Bill 99] Inside: 1. Introduction 2. Welfare 3. The Fresh Start Agreement: non-welfare www.parliament.uk/commons-library | intranet.parliament.uk/commons-library | [email protected] | @commonslibrary Number 7389, 20 November 2015 2 Contents Summary 3 1. Introduction 5 1.1 Fresh Start agreement 5 Process 5 Content 6 Political intent 6 1.2 Stormont House Agreement 7 2014 negotiations 7 Finance and welfare 8 Other elements 9 Implementation: January-August 2015 10 1.3 Political events summer 2015 11 1.4 Reaction to the Fresh Start agreement 12 2. Welfare 15 2.1 Introduction 15 2.2 UK Governments’ welfare reforms 15 2.3 Welfare reform in Northern Ireland 17 The parity principle 17 Welfare Reform Bill timeline 17 Agreed “flexibilities” and mitigation measures 19 2.4 Welfare announcements in the Fresh Start Agreement 23 Implementing welfare reform and associated “top-up” arrangements 23 Legislative Consent Motion 26 2.5 The Bill 26 Fast-track procedure 27 3. The Fresh Start Agreement: non-welfare 29 3.1 Ending paramilitarism and tackling organised crime 29 3.2 Northern Ireland Executive Financial Reforms and Context 31 3.3 UK Government financial support 32 Balanced budget 32 Funding for action against paramilitary activity 33 3.4 Irish Government financial support 33 3.5 Other parts of the Stormont House Agreement 34 Flags, identity, culture and tradition 34 Parades 34 The Past 34 Institutional reform 35 Contributing Authors: Steven Kennedy and Lizzie Parkin, Social Policy Section, Welfare Paul Bowers and Hazel Armstrong, Parliament and Constitution Centre, Non-welfare Cover page image copyright: : Volunteer's Reception, Assembly Buildings, Stormont, Belfast by Joel Riley. Licensed under CC BY 2.0 / image cropped. 3 A Fresh Start: the Stormont Agreement and Implementation Plan and the Northern Ireland (Welfare Reform) 2015-16 [Bill 99] Summary The Northern Ireland (Welfare Reform) Bill is part of a wider process to stabilise functioning of the political institutions in Northern Ireland. The focus of the Bill is on welfare, but it represents part of the implementation of a package agreed between the UK and Irish Governments and the largest Northern Ireland parties: the Fresh Start agreement. The agreement includes set of linked measures on welfare: • A Legislative Consent Motion to allow the UK Government to legislate for welfare reform in Northern Ireland (this was passed on 18 November 2015) • A Bill at Westminster (the present Bill), under a fast-track procedure, to enable Orders in Council to give effect in Northern Ireland to existing and prospective welfare changes in Great Britain • £585 million to be allocated from Executive funds to “top-up” UK welfare arrangements over a four-year period, including topping-up tax credits and ensuring tenants in Northern Ireland are not affected by the social sector size criteria1 • Establishment of a working group to make proposals on use of the additional funding The Bill does not itself contain welfare provisions but is instead an enabling measure providing a power by Order in Council to: • Legislate for welfare reform in Northern Ireland; and • Confer powers on the Secretary of State or the Department for Social Development in Northern Ireland to make further provision by regulations and order According to the Explanatory Notes, the Bill will be followed by an Order in Council (a draft has been published) based on the Northern Ireland Assembly Welfare Reform Bill. It will contain regulation making powers and measures to implement welfare reform in Northern Ireland. The political situation in Northern Ireland deteriorated during 2015: the Fresh Start agreement as a whole is an effort to overcome these difficulties. They initially manifested in delays over implementation of the Stormont House Agreement of December 2014. This had been intended to achieve progress on contentious issues such as parades, flags and dealing with the past, and to enable UK-wide welfare reforms to take place in Northern Ireland while offsetting their impact and yet still achieving a balanced budget. Implementation of this slowed when the Northern Ireland legislation on welfare reform was blocked in the Assembly. Several deadlines for progress on the Stormont House Agreement were missed. In August 2015 the Police Service of Northern Ireland stated that IRA members may have been involved in the murder of a former IRA member, Kevin McGuigan Snr, who was himself a suspect in the murder of another former IRA member, Gerard Davison. This implied official recognition that the IRA still existed. The Ulster Unionist Party left the Executive and Democratic Unionist Party Ministers adopted a strategy of rolling resignations. The UK Government commissioned an independent assessment of paramilitary organisations in September 2015, which reported in October 2015. It concluded that all the main paramilitary groups operating during the Troubles still existed, and that members 1 Also referred to as the “bedroom tax” and the “Removal of the Spare Room Subsidy.” Number 7389, 20 November 2015 4 still engaged in violence, but that their leaderships were committed to political objectives achieved through peaceful means. The DUP returned to its normal role in the Executive after this report. Talks were also set up between the parties to the Stormont House process, the two Governments and the five largest parties in the Assembly, which are those entitled to positions in the Executive. After ten weeks an agreement was reached, A Fresh Start: the Stormont Agreement and Implementation Plan, published on 17 November 2015. This includes measures on welfare and paramilitarism, the core of the impasse, and a commitment to a start date and rate for the devolution of corporation tax (April 2018 at 12.5%). It also includes material on other aspects of the Stormont House Agreement, including a draft Northern Ireland Assembly bill to reduce the number of Members for each constituency from six to five. Some other aspects of the Fresh Start agreement will require UK legislation, such as a change in the Pledge of Office, a restriction on spending plans that exceed the block grant or borrowing limits, and an extension of the period between the Assembly meeting and the Executive being formed, to allow agreement on a Programme for Government. 5 A Fresh Start: the Stormont Agreement and Implementation Plan and the Northern Ireland (Welfare Reform) Bill 2015-16 [Bill 99] 1. Introduction Summary The political situation in Northern Ireland deteriorated during 2015, leading to delays in implementation of the Stormont House Agreement of December 2014, a breakdown in relations within the Executive, and warnings that direct rule might have to be imposed. Welfare reform legislation stalled in the Assembly, and the Police Service of Northern Ireland confirmed the continued existence of the IRA. The Ulster Unionist Party left the Executive and the Democratic Unionist Party resigned ministerial positions on a rolling basis. Talks went on between the five parties entitled to positions in the Executive, the UK Government and the Irish Government. After ten weeks an agreement was reached, A Fresh Start: the Stormont Agreement and Implementation Plan, published on 17 November 2015. This includes measures on welfare and paramilitarism, the core of the impasse, and a commitment to a start date and rate for the devolution of corporation tax. It also includes some material on other aspects of the Stormont House Agreement, many of which had missed original deadlines. These include a draft Northern Ireland Assembly bill to reduce the number of Members for each constituency from six to five. The welfare aspects of the Fresh Start agreement require legislation in the UK Parliament. The Northern Ireland (Welfare Reform) Bill 2015-16 had its first reading on 19 November 2015. 1.1 Fresh Start agreement Process On 17 November 2015 an agreement on Northern Ireland was announced. The text of this was published as A fresh start: the Stormont Agreement and implementation plan. This was the outcome of ten weeks of talks in Northern Ireland, aimed at resolving a political crisis that had developed over the summer. The talks involved the UK Government, the Government of the Republic of Ireland and the five political parties entitled to positions in the Northern Ireland Executive.2 These talks were a way of resolving issues which had arisen in implementation of the Stormont House Agreement during 2015. In particular, difficulties over welfare reform and the budget had stymied wider implementation and brought about a political stalemate. According to the Secretary of State, Theresa Villiers, there was “a real risk that collapse of devolution and a return to direct rule might follow.”3 Difficulties had also arisen in August-September 2015 over the Police Service of Northern Ireland statement that the Provisional IRA may have been involved in the murder of a former IRA member. In response the 2 DUP, Sinn Fein, Alliance Party, UUP and SDLP. 3 A Fresh Start: The Stormont Agreement and Implementation Plan, 17 November 2015, p7 Number 7389, 20 November 2015 6 UUP withdrew from the Northern Ireland Executive, while DUP Ministers resigned all but one post on a rolling basis. Content The Fresh Start agreement The Commons Library has published other briefing papers relevant to contains a range of the Agreement and the Bill: commitments by the Executive and the two Debate Pack: Northern Ireland update, 8 October 2015 Northern Ireland: Stormont House Agreement update, 18 August 2015 Governments: those Welfare Reform and Work Bill [Bill 51 of 2015-16], 16 July 2015 concerning welfare give Devolution of corporation tax to Northern Ireland, 12 February 2015 rise to the Northern Ireland Northern Ireland (Miscellaneous Provisions) Bill: amendments, 11 (Welfare Reform) Bill 2015- March 2014 16, discussed in detail in Northern Ireland (Miscellaneous Provisions) Bill, 15 November 2013 Section 2 below.
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