Villiers says no more money available for North’s welfare reform

Northern Secretary Theresa Villiers has insisted that no further money will be forthcoming from the British government to resolve problems over welfare reform that again threatens the future of Stormont.

Ms Villiers made her comments yesterday after the North’s Deputy First Minister, Martin McGuinness, caused political shock by withdrawing Sinn Féin support for the welfare Bill that was to be enacted at Stormont on Monday.

The final passage of the legislation was held up as the British and Irish governments and the Northern parties tried to determine if there were any compromise solutions that could end this unexpected crisis.

Minister for Foreign Affairs Charlie Flanagan was also involved in contact with Ms Villiers and the Northern parties seeking a resolution to the impasse.

Mr McGuinness travelled with First Minister Peter Robinson to New York yesterday to try to drum up investment into Northern Ireland. Party spokesmen said that during this trip they would also see if a solution could be found.

Mr McGuinness said he was in “resolution mode”. Mr Robinson accused Sinn Féin of reneging on a clearly stated Christmas deal and of acting in a “dishonourable and ham-fisted” fashion.

Sinn Féin has complained that notwithstanding that it endorsed the Stormont House Agreement at Christmas, it has now discovered there is a shortfall in the money required to cushion the effects of welfare reform on benefit recipients.

Mr McGuinness said that an additional £200 million (€282 million) over the next six years would solve the problem. However DUP MP Gregory Campbell said this was "not a runner".

Details of agreement

The DUP estimates that an additional £280 million or more would be required to meet the Sinn Féin demands. Party members said this was never part of the Stormont House Agreement.

“Everyone else seems to be clear on what the ramifications were of the deal. They seem to have only belatedly discovered the extent of some shortfall,” said Mr Campbell.

If this latest problem is not resolved, then a promised £2 billion in grants and loan-raising powers offered to the Northern Executive as part of the Christmas deal will be placed in jeopardy. It could also mean the devolution of corporation tax-setting powers to Stormont being put on hold. More seriously, there is real concern in Dublin, London and Belfast that this crisis could render the Northern Executive and Assembly unsustainable.

Source of funds

Ms Villiers made clear yesterday that if the Northern Executive wants more money to prop up welfare support, it must come from Stormont resources.

She said the British government would not fund a more expensive welfare system in Northern Ireland than the system in Britain. “If Northern Ireland wants a more expensive welfare system, then they need to fund that out of the block grant,” she said.

“Unless we get this resolved then we are in a pretty serious situation because the other aspects of the Stormont House Agreement are put in jeopardy,” she added.

“But I think the situation is certainly retrievable but it will require work from all five parties and I will be closely engaged on this too.”