PAYMENTS INTO THE FUND: SECRETARY OF STATE (Hansard, 24 July 1998)

§ Mr. Moss
I beg to move amendment No. 26, in clause 46, page 23, line 20, at end add— '( ) Subject to subsection ( ) below, the Secretary of State shall make such a payment at least once every financial year. ( ) No such payment shall be made unless the Secretary of State has laid before the House of Commons a statement certifying that the payment recognises the needs of Northern Ireland in relation to the needs of the United Kingdom as a whole.'. I welcome the Minister of State's remarks about clause 45. Clauses 45 and 46 are as important as many others in the Bill. Northern Ireland is the only part of the United Kingdom to have its own Consolidated Fund, although clause 61 of the Scotland Bill will set up such a fund for Scotland. The Province has always been subject to the same taxes as the rest of the country, which are collected by UK Departments. Its share of those taxes and any other revenue collected in Northern Ireland is paid into its Consolidated Fund. Parliament then adds a further amount—the so-called subvention—to that fund each year. That consists, first, of an automatic increase, calculated under the Barnett formula and, secondly, of an additional payment negotiated in each year's spending round.
Under the Barnett formula, any change in spending in Great Britain is also applied to Northern Ireland, but scaled down to reflect the Province's smaller population. That means that if spending on relevant Great Britain 1403 programmes is raised or cut by £100 million, funding for Northern Ireland increases or decreases by about £2.91 million.
That figure is now adjusted annually to take account of population changes. I believe that the figure for last year was £2.87 million. The Minister, who is responsible for finance, will no doubt confirm that. The Barnett formula determines only the annual change in funding for Northern Ireland, not the baseline figure. Moreover, as the change is based on levels of expenditure in Great Britain, it does not even work to maintain higher per capita spending in the Province. Indeed, if an increasing amount of the Province's funding is based on the lower level of spending in Great Britain, the gap narrows.
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That has not happened in practice because, for some time, every Secretary of State for Northern Ireland has always secured an additional payment for the Province. However, it may be more difficult for Secretaries of State to do so after devolution, because the Bill says only that The Secretary of State may from time to time make payments into the Consolidated Fund of Northern Ireland out of money provided by Parliament. Amendment No. 26 would add the following: Subject to subsection ( ) below, the Secretary of State shall make such a payment at least once every financial year. The Scotland Bill and the Government of Wales Bill say "shall"—not "may", the word used in the Bill before us. The second part of our amendment reads: No such payment shall be made unless the Secretary of State has laid before the House of Commons a statement certifying that the payment recognises the needs of Northern Ireland in relation to the needs of the United Kingdom as a whole. In short, we believe that the amendment guarantees that the Province will continue to get the funding that it needs, based on an accurate assessment of those needs in relation to spending in the United Kingdom as a whole.
No Minister in Northern Ireland, and I expect no Ministers of the Assembly, as and when it starts to do its work, would want a situation to arise where the Assembly and the people of Northern Ireland are left waiting for the crumbs from the Treasury table, unable to question whether the money paid into that Consolidated Fund, plus any extra moneys, is related specifically to the unique needs of Northern Ireland, which have been recognised by every Government and Secretary of State since direct rule.

§ Mr. Paul Murphy
The amendment suggests that money to supplement the Consolidated Fund in Northern Ireland may be given without proper consideration to the balance of public expenditure throughout the United Kingdom. That is not the case; it is given on the same basis as money in any other part of the country. It is unusual only in being identified in statute. In Scotland, by comparison, there is no division into attributable and non-attributable payments. The Northern Ireland subvention is properly authorised annually by Parliament in the United Kingdom, in a process which, of course, takes account of the financial requirements of all parts of the United Kingdom.
The changes proposed are unnecessary. The existing funding mechanism enables the comparison to be made—which the hon. Member for North-East Cambridgeshire (Mr. Moss) mentioned—between the needs of Northern 1404 Ireland and those of the United Kingdom as a whole. I believe that it reflects population and needs, as in the case of the other regions and countries of the UK, and I do not believe that we should single out Northern Ireland in the way that the amendment proposes.
As I said earlier, there is force in the argument that the arrangements in clause 45 for attributing a share of taxation to Northern Ireland are wrong. That is why I spoke briefly a moment ago. It is only right that we should be concerned about the way in which Northern Ireland is funded—the hon. Gentleman is absolutely right about that—and that the needs of the entire United Kingdom are taken into account. I think that the allocation is fair; it has been with us a long time and the arrangements will be similar under devolution. The measure has operated for many years, including when the hon. Gentleman was a Northern Ireland Minister. I do not think that it would be right to go further than that, and I hope that the hon. Gentleman will withdraw his amendment.

§ Mr. Moss
I thank the Minister for that response. However, two questions remain unanswered. First, why does the clause say that the Secretary of State "may" when the word "shall" is used in the Scotland Bill and the Government of Wales Bill? Can the Minister explain why Northern Ireland is different? We should certainly firm up the wording to incorporate the word "shall" instead of the word "may". That would give a little more comfort to future Members of the Assembly and to Ministers who will take over in Northern Ireland.
I am reassured by the Minister's comments that he believes that the future distribution of moneys to Northern Ireland will be fair and will take account of Northern Ireland's unique needs. Nowhere else in the United Kingdom has the pressure of law and order and terrorism on its budget. I hope that that is a thing of the past, but nothing on the horizon suggests that expenditure in that area will diminish in the short term.
Perhaps the issue will be revisited in another place, but I think that we should give Assembly Members and the ministerial team further assurances that Northern Ireland's unique needs will not be left to the whim of a Secretary of State but be set down in statute. That would give them the firm reassurance that I am sure that they seek. On the basis of the Minister's response, I shall seek leave to withdraw the amendment.

§ Mr. Murphy
I realise that the hon. Gentleman intends to withdraw the amendment, but he may be interested in my response to his two questions. First, he referred to the use of the word "may" in the clause. That matter will be considered as a consequence of our re-examination of clause 45. As he knows, the issues to which he referred are transferred matters and do not include the law and order budget. I am grateful to the hon. Gentleman for agreeing to withdraw the amendment.

§ Mr. Moss
I beg to ask leave to withdraw the amendment.