Northern Ireland’s latest crises

Posted on October 9, 2015 · Posted in Public Finance

Northern Ireland is in crisis with a resignation that is not a resignation by First Minister Peter Robinson. He has ‘stepped down’ temporarily, with finance minister Arlene Foster deputising while all-party talks take place to save the Stormont Assembly and Executive. As well as Robinson, all his DUP colleagues – bar Foster – also resigned, leaving health, the economy and social development without ministerial control for the moment.

 

In truth, it is not one political crisis that brought us here, but three. According to Northern Ireland’s chief constable, George Hamilton, members of the Provisional IRA were involved in the recent murder of Kevin McGuigan. McGuigan was a former IRA member, widely suspected of being behind the murder of former senior IRA commander Jock Davison. Hamilton’s comments destroyed the pretence that the Provisional IRA no longer exists.

 

While Sinn Fein are dealing with accusations of being too close to a paramilitary killing, its main partner in government has its own problems. The DUP strongly denies any connection with a £7m ‘fixers’ fee’ discovered in an offshore bank account that was alleged – by a member of the Irish Dail – to have been earmarked for a Northern Ireland politician or political party. That money came out of professional fees paid by US investment fund Cerberus when it bought a loan book from the Irish bad bank Nama. Cerberus says it had no knowledge of the payment and has done nothing wrong. The transaction is being investigated by the UK’s National Crime Agency and the US Department of Justice.

 

But it is the third crisis that might collapse devolution – welfare reform. Last December’s Stormont House Agreement supposedly resolved this, agreeing that Northern Ireland could adopt less severe benefits cuts than those in Great Britain. But the details were not included within the Agreement.

 

The Stormont House Agreement is now mired in quicksand. Sinn Fein claimed that a bill in the Northern Ireland Assembly to introduce benefits cuts provided less protection for claimants than promised. Cynics suggest that Sinn Fein is more motivated by a general election due soon in the Irish Republic, where it could become the second largest party. Implementing austerity in the North while campaigning against it in the South is bad politics.

 

Faced with this crisis, the Assembly approved a ‘fantasy budget’, which did not balance – in the hope that ‘something might turn up’. It hasn’t and emergency cuts in public spending are causing serious problems – pot holes and school buildings are going unrepaired, student numbers have been heavily cut at universities and hospital waiting lists are growing – one fifth of the population is now queuing for treatment.

 

For the last year, Peter Robinson has urged the Westminster government to break the impasse by dissolving the Assembly for a short period while the UK Government imposes welfare reform on Northern Ireland. The secretary of state, Theresa Villiers, now says she is willing to do this. Sinn Fein are furious – or at least they say they are. It could, though, be a way out of this crisis.

 

In truth, neither Sinn Fein nor the DUP want the devolved institutions to collapse. Nor do two of the other three parties that have been represented on the Executive – the SDLP and the Alliance Party. But the fifth, the Ulster Unionists, have walked out of the Executive, on a supposed point of principle because of the Provisionals’ reported involvement in murder. The cynical view is the Ulster Unionists are themselves being cynical – outflanking the DUP for hardline loyalist votes and also paying back the DUP for traducing the Ulster Unionists in 1998.

 

On that occasion it was the Ulster Unionists that signed the Good Friday Agreement, allowing Sinn Fein into government. And it was the DUP that attacked their long time rivals, the Ulster Unionists, for supposedly being unprincipled. Now the roles have been reversed, creating a serious political difficulty for Peter Robinson, who built his reputation as a hardliner.

 

The DUP and Sinn Fein despise each other, but understand their mutual dependency. If they cannot work together the risk is that armed conflict will return. Stubborn though they are, neither party has any wish for that. So some fudge will probably be worked out. Whether Northern Ireland can permanently live off a diet of unhealthy fudge – politely termed ‘constructive ambiguity’ – is another question entirely.