Devolving the cuts
The emerging Budget makes little sense without a Programme for Government, John O’Farrell warns, and devolved governments have the freedom to make better choices.
Last October, the Minister for Finance and Personnel and his colleagues in Wales and Scotland, joined by their respective first ministers and deputy first ministers, said in an historic joint statement that the cuts were “too fast and too deep”, that the UK Government’s plans are “entirely the wrong approach for the economy” and that the cuts will do “lasting damage to the economy and the fabric of our public services.”
The trade union movement across these islands has forcefully argued for policies based on investment. We still hold firm in the belief that “promoting economic growth is the best way to restore the health of our public finances and this must be our overriding priority,” in the words of the joint statement.
The draft Budget holds little of the promise of the joint statement. The Minister’s assertion that “this draft Budget continues to prioritise the economy, provides a degree of protection to the Health Service and seeks to assist the most disadvantaged in our society” rings quite hollow as the slim details emerge from each devolved department.
In Para 1.2, the “emerging draft Programme for Government” is cited as government initiatives with which the draft Budget is consistent. As the PfG is not expected to see the light of day until after the Assembly elections in May, it is hard to evaluate any consistency, unless the draft Budget is the PfG, regardless of the choices made by the electorate in Northern Ireland next May.
If the PfG states, de facto if not de jure, that its contents depend upon the whims and wisdom of the Chancellor, then many will ask what was the point of 13 years of hard talks and meaningful compromises between the political forces in Northern Ireland.
This is not a trivial point. There are remnants of politics as it used to be played out, preaching dissent and practicing mayhem. Since justice and policing was devolved, their costs have also landed on the shoulders of the Executive. The Department of Justice is the third most expensive department, totalling 12 per cent of the entire budget. Serious unrest or other, unthinkable but plausible, scenarios, will have a fiscal consequence for the Executive which did not arise heretofore. Don’t think that lesson is being missed by people with the mentality of “the worse, the better.”
Nor does it help that the public consultation of the draft Budget was a farce. Public input to the consultation has been truncated and legally dubious. Perhaps a one-year budget, as agreed by the Government of Scotland, would have been preferable. As it is, we are going to have an election with most of the possibilities of the next PfG already determined by this four-year plan.
Placing responsibility for detailing their cuts onto individual departments seems to be either shifting the blame for unpopular decisions onto the individual ministers, or a failure of the basic principles of collective cabinet responsibility. Either way, this is a recipe for division which bodes ill for the effective functioning of the Executive. It also makes it more difficult for the Executive to make a strong collective case to the UK Treasury against the cuts being imposed from above.
The structural weaknesses of the Northern Ireland economy have been cruelly exposed by the recession, and it is absurd to assert that a private sector which is too small and extremely fragile can take the reins of a ‘rebalanced’ economy, and create stable and sustainable employment.
In many ways the public sector is the backbone of the economy of Northern Ireland. Irresponsible cutting at that base will undermine the foundations of any economic recovery, and could plunge Northern Ireland into an economic trough from which it will take decades to recover.
This is an obvious observation once one looks at the limited data supplied. The economy of Northern Ireland is in no position to be anyone’s experiment, and that is true politically as well. The plan being espoused by the UK Coalition Government will almost certainly not work, even in its own narrow ideological terms. They have no right to impose such a radical plan upon a region of the UK which has elected not a single MP from either party in that coalition.
It is time for a Plan B, and it is time for the devolved governments to argue forcefully with the Westminster authorities for a better and a fairer way.
