Brian Walker offers a comprehensive overview of the Stormont House Agreement, passed just before Christmas. Although it attracted little comment from the outside world, the Agreement sought to take action on longstanding issues underpinning the recent deadlock.
At first sight, apart from coinciding with great festivals of the Christian calendar, the contrast between the Stormont House Agreement negotiated by the Northern Ireland parties two days before Christmas and the historic Good Friday (Belfast) Agreement of 1998 (GFA) could hardly be greater. The GFA brought thirty years of violence to an end and the Assembly into precarious existence. Stormont House passed with little comment from the outside world and even at home. Although the executives of the two main parties the unionist DUP and the republican Sinn Fein endorsed the deal, it is far from clear what exactly has been agreed. True, the threat of breakdown was never far away in the outworking of the GFA. Towards the end of last year rumbles of impending collapse were heard again but this time they lacked conviction. No one has an interest in collapsing the system today. All the same, the need for a basic examination of power sharing had become pressing as relations had soured. With sporadic trouble in the streets and the continuing threat of violence from republican dissidents, the leading parties the DUP and Sinn Fein were torn between their roles as sectarian champions and their responsibilities as partners in government, with the former too often winning out.
The all-party consociational form of government the GFA introduced had indeed been successful in locking opposite political poles together. The big question for the negotiations at Stormont House, a residence for UK ministers, was whether the system could allow for breakout from the communal constraints to produce something closer to “normal” government for a “normal” society. So after weeks of talking about an extending agenda of deadlock, the parties seem to have felt they could not afford to walk away with nothing.
Elements of agreement
The new agreement has three elements: first, avowing at last after many failures to deal with the legacy of the Troubles and flare ups of over parades and the flying of flags, the identity issues that are incomprehensible to the utilitarian mind-set of many political scientists; slimming down the elaborate and expensive political institutions; and more immediately, reluctant recognition that Northern Ireland is no longer exempt from the financial constraints that apply in the rest of the UK and – in spades – the Irish Republic. After only a minimum of involvement this time by the prime ministers of the UK and Ireland and US mediators, the old custom of appeasing local political sentiment has been replaced by a little more rigour, a touch of stick as well as carrot.
After frustrating repeated attempts to sort of out controversial parades routes by a Westminster appointed commission, the local parties have been told to use the lawyers of the Executive to come up with a formula of agreement and eventually take over responsibility for this most typical of local controversies themselves. The key, which has so far proved elusive, is for local unionists and republicans to agree to negotiate. There is nothing in the agreement which brings that nearer. Rows and riots over parades and the official display of the Union Jack matter because they keep the main parties apart and can lead to serious violence.
Wider identity issues which the parties have long failed to agree on will now be handed over to a Commission on Flags, Identity, Culture and Tradition. Legacy solutions are to subject to the approval of an Implementation Group. Commissions can become classic bureaucratic stalling devices or something better. Politicians will be a majority but they will have lay leadership, following the model of the broadly successful Northern Ireland Policing Board, where divided politicians can use lay cover to make common sense arrangements. The Irish government will become a partner in this and in creating history archives.
Finance: welfare and the budget
The flashpoint of possible breakdown was over finance after it had become apparent that the begging bowl strategy had ceased to work its old magic with Westminster. Although all the local parties were complicit in resisting Treasury discipline at first, the charge was led by the militantly anti-austerity Sinn Fein. When the draft local budget was failing to balance in October, the Treasury at first imposed a fine by reducing the block grant and levied interest charges on a temporary bail-out loan. Next, Sinn Fein threatened crisis if welfare cuts were not reduced. Their anti-austerity stance is popular in the Republic where they topped a party preference opinion poll last month, so why not in the North? Bowing to “Tory cuts” in the North would also breach all-Ireland consistency. Legally welfare has been devolved in Northern Ireland ever since the days of the pre-1972 parliament. But the province’s dependence on subvention from Westminster is all the greater because the Executive shuns raising local revenues from water charges, further rates increases and prescription charges. Although brinkmanship was tried up to the last minute, the old plea of the Troubles legacy failed to work in the same old way. A price of £150 million was put on it, to fund historic legal investigations and the creation of archives.
It appears they have eaten their words and accepted some sort of welfare cap by ratifying the Stormont House agreement, although the parties have not explicitly admitted this. Confirmation will come when the Welfare Reform Bill comes before the Assembly again later this month.
The terms of Whitehall’s package of “£2 billion extra spending power” over 10 years are highly dirigiste, if sometimes still opaque.
In a remarkable intervention in a devolved area, HM Treasury will provide £500 million new money for sharing and integration education developments between Protestants and Catholics approved by Whitehall, and the £150 million over five years for dealing with the past. £350m in new borrowing will fund infrastructure schemes over the next 4 years. £700m of capital borrowing over four years will fund a voluntary public sector redundancy scheme involving thousands beginning in two months’ time. About £350 million is genuine new money which in an annual budget of £10 billion is not massive. The banker’s terms are also strict.
The Executive will have to find top-ups for welfare from its own budget and asset sales. Treasury fines for failing to balance the budget and implement welfare cuts will be reduced the faster the Assembly agrees to compatible terms. After the next election in 2016, wish lists produced by rival ministers in their departmental silos will be replaced by a proper programme for government and a balancing budget with output targets and outcomes.
The devolution of corporation tax limited to business activity locally will be conditional on progress on the above according to set timetables. The rate which is yet to be set will bring the local rate down from the present UK level of 21% closer to the Republic’s 12.5%. It will proportionally reduce the block grant, already strained by Barnett squeeze and the terms of new Treasury deal. Only when these figures are available will it be possible to assess the early net benefits of reduced corporation tax. It will be administered by Her Majesty’s Revenue and Customs to exclude brass plating by international companies.
The parties have pledged themselves to cut the number of Assembly members from 108 to 90 and Executive departments from 12 to 9 and to allow for the formation of an opposition with effective speaking rights. In theory the creation of an opposition raises the possibility of a future alternative coalition.
The introduction of a greater lay element within governance to help solve difficult issues and greater supervision by the national government which the Stormont House Agreement envisages may be prices worth paying by the rival unionist and republican parties to end the paralysis which was clearly hampering their effectiveness and sapping their reputation with the public. This at any rate is the optimistic interpretation of the Stormont House Agreement. The pessimistic one is that will degenerate into rows over the details during more than a full year of electioneering, culminating in the Assembly election next year.
About the Author
Brian Walker is Hon Senior Research Fellow and press officer at the Constitution Unit.