Welfare reform - Stormont faces another maze

Every penny counts

Every penny counts

By Steven McCaffery

DISPUTES over flags and parades have poisoned the atmosphere in Northern Ireland over the last year – but the impact of welfare cuts is the real political dynamite that could rock the Assembly if it is not handled with care.

Stormont is already under strain, with fears that any further breach of agreements between the DUP and Sinn Féin could push their power-sharing government past the point of no return.

But while those tensions are being played out in public, the two parties have for months been privately discussing how to handle the welfare cuts being imposed by Westminster.

Now dramatic new research set out here in The Detail has presented evidence that vulnerable communities in Northern Ireland will be hit harder than in any other region of the UK, with researchers claiming the local economy could lose up to £750 million each year.

With this bleak forecast now in the public domain, the response of Stormont’s main parties will depend on a series of political variables.

The DUP and Sinn Féin are circling each other on the issue, while the response of the Conservative-led government in London will also be key to how events play out.

Stormont leaders essentially have three options.

They can agree a compromise package that blunts the worst of the cuts – but it is unclear how they might fund it from their already stretched Assembly budget.

They can continue to delay a decision on welfare reform and risk a potential £60 million fine from London at the end of this financial year.

Or they can flatly refuse to implement the changes and risk Westminster ultimately intervening over the heads of local politicians to impose the cuts anyway.

A further complicating factor is that Sinn Féin is acutely aware of the risk to its political ambitions in the Irish republic, where its soaring opinion poll figures are based on an anti-cuts agenda.

So what factors will the various parties be weighing up?

Sinn Féin

Any political party will have a range of policy aims that it hopes to make progress on in various areas of government.

But in addition, they have overarching long-term strategic objectives and for Sinn Féin a key political priority is building the party in the republic.

This is one of the reasons why earlier this year republican sources were whispering that welfare cuts imposed by Westminster could damage Northern Ireland’s power-sharing government.

Party sources stress that the key concern for republicans is the impact the cuts will have on vulnerable communities in Northern Ireland that are already under pressure because of the wider difficulties in the economy.

But an additional political factor is how the image of Sinn Féin overseeing welfare cuts in the north would be received in the south.

Sinn Féin made its breakthrough into the politics of the Dáil at the last Irish General Election in February 2011.

But as The Detail reported earlier this year here, the development provided republicans with a precarious foothold, but one which they are determined to build on.

An opinion poll published in the Irish Times this week placed Sinn Féin as the second most popular party in the republic.

The main party of government Fine Gael was found to be on 26% support, Sinn Féin on 23%, Fianna Fáil on 22%, with independents on 21%.

Most significantly, Sinn Féin’s left wing rivals in Labour dropped to a new low of 6%.

Labour is finding life hard as the junior partner in a coalition government that is imposing deep cuts which it is hoped will get the republic’s beleaguered economy back on track.

But Sinn Féin can only hope to capitalise on the discomfort of other parties if it can maintain its attack on the cuts agenda.

Its rivals in the Irish parliament have tried to identify inconsistencies between Sinn Féin’s role as a party of government in the north and a party of opposition in the south.

Those attacks have had little impact, but the image of Sinn Féin allowing Stormont to facilitate cuts to the deprived, the sick or the disabled would be easier to translate to a southern audience.

Sinn Féin maintains, however, that its prime concern is minimising the impact of the cuts on deprived communities and hard-pressed individuals.

It claims that in Stormont departments such as Education and the Office of First Minister and Deputy First Minister it has sought to direct funding towards those in greatest need.

And it has repeatedly raised its concerns over welfare reform in public over the last year, with deputy First Minister Martin McGuinness declaring in April: “Sinn Féin will resist this onslaught on the most vulnerable.”

The dilemma it faces is how to fund any compromise welfare package.

And a question mark hangs over how party strategists at the top of Sinn Féin will handle the issue if they are pushed by London, or by their government partners in Belfast.


Since last year the Democratic Unionists, who hold the Social Development ministry that oversees welfare reform, have warned of the cost of refusing to implement the cuts.

By March 2014 the Westminster government could impose a £60million `fine’ on Stormont if there is a continued delay in implementing the welfare reforms.

But if the Northern Ireland parties become gridlocked on the issue and a refusal to implement the reforms runs into the long-term, this would represent a breach of parity with social security arrangements in Britain.

The government could fine Stormont, but the worst case scenario is that London could intervene in Stormont’s affairs to directly enforce the cuts – (a theoretical risk which it has been claimed could require dismantling part of the power-sharing arrangements dating back to 1998, thereby potentially alienating Sinn Féin).

The DUP, meanwhile, has insisted “it is not a cheerleader” for the cuts, but has said the most realistic means of easing the burden is to engage with the authorities in Westminster and avoid a crisis that might undermine the provision of welfare supports.

As a result, the Social Development Minister Nelson McCausland and his officials have been involved in protracted efforts to secure concessions from London that recognise Northern Ireland’s particular needs.

The Minister said this has proven fruitful, but he has also showed some sympathy with the ideology driving the Westminster reforms, pointing to the need to change the welfare system so it becomes “a springboard rather than a trap”.

The increasing claims that the DUP has become disconnected from working class Protestant communities – something it denies – may have heightened its concerns at how the implementation of the reforms will be received within its own community.

But the party leader and First Minister Peter Robinson has already joined Mr McGuinness in asking the London government to make a special case of Northern Ireland where the legacy of the Troubles has contributed to higher levels of disability, mental illness and poverty.


The British government has been accused of failing to properly steward the peace process and it has responded by seeking to accentuate the positive in Northern Ireland.

This has been a difficult task during a year dominated by riots over parades and flags, as well as the images of political discord at Stormont.

But with the Conservative Party inevitably focused on the issues facing the UK economy, it has also sought to focus on economic matters in Northern Ireland.

It unveiled an economic package in June to help boost local commerce and argued that its decision to host the G8 here also showcased Northern Ireland in a positive light.

Prime Minister David Cameron has promised to attend the international investment conference planned for Belfast next week and there are hints that jobs announcements will be made in the run-up to the event.

But the conference comes amid the fallout over the collapse of Stormont’s plans to redevelop the former Maze prison site – scuppering the 5,000 jobs that project was predicted to deliver.

London will want to avoid a further crisis in Belfast over the implementation of the welfare reforms that the Cameron government has imposed elsewhere in the UK.

But if the Prime Minister makes a special case of Northern Ireland, how will politicians in Britain react?

It was a concession he was reluctant to allow when Belfast sought special treatment on Corporation Tax.

Like the Maze row before it, welfare reform is another issue contributing to gridlock at Stormont, and there is no obvious way out of it.

© The Detail 2013