All down to finance as Kenny and Cameron get brinkmanship in first

Taoiseach Enda Kenny offered a snappy explanation as to why he and British prime minister David Cameron so abruptly quit the Stormont talks yesterday morning.

It happened, he said, against the background of the Northern Executive and Assembly looking “for more money that is not going to come”.

There were many issues to be resolved but in the end, it all distilled down to finance.

The two leaders dealt a short, sharp shock to the Northern body politic by so exiting Belfast so promptly. “It was bang, bang, bang, cheerio, we’re out of here,” as one Government source succinctly put it, himself surprised that matters moved so speedily.

Kenny and Cameron are prepared to come back before Christmas but only if the Northern parties – in particular Sinn Féin and the SDLP – are willing to accept that Northern Ireland must take a dose of the austerity medicine that Britain and the Republic have already swallowed.

During talks that went on until 1.30am on Friday morning, Cameron and Kenny presented the parties with an 18-page document outlining the two governments’ view of how contentious issues such as finance, the past, parades and flags might be tackled.

On the last three issues, it was essentially a repackaged version of last year's proposals from the talks chaired by US diplomat Richard Haass which were rejected by the DUP and Ulster Unionists.

The document allowed for the creation of an historical investigations unit dealing with past killings of the Troubles that would replace the now disbanded Historical Enquiries Team. Also proposed is a separate information retrieval body where, with a degree of immunity, people could tell the truth about the conflict.

Again in line with Haass, the flags issue was kicked down the road with the proposal to establish a flags, culture and identity commission that would report in 18 months. Timing here was important as by then two key elections – the British general election in May and Northern Ireland Assembly polls in 2016 – would be out of the way.

On parades, it was proposed in principle that power be devolved from the Parades Commission to the Northern Assembly. That might give unionist parties some satisfaction, but it won't make it easier to resolve the relatively small number of contentious parades that flare up each year.

There was also mention of slimming down the size of the Executive and Assembly, which might not prove controversial, and a reference to the Irish language which might. Differences remained in all these areas, with former SDLP leader Mark Durkan complaining of a "dilution" of Haass. But there was progress, and more could be achieved.

However, the big sticking point was finance. Cameron offered a deal which he said had the “financial firepower” to deliver up an additional £1 billion for the Executive over the next five to six years to cushion reductions in welfare payments and budget cuts of £1.5 billion up to 2019.

The trouble , according to Peter Robinson and Martin McGuinness, was that Cameron was essentially offering the Northern Executive additional powers to raise its own loans. It wasn't new money – or "funny money", as Gerry Adams put it – which was what the DUP, Sinn Féin, the SDLP, the Ulster Unionists and Alliance wanted.

Robinson rather neatly captured what Cameron was offering: “If he wants to bribe us, to bribe us with our own money comes a bit short.”

But the bottom line of what Cameron was saying was that Sinn Féin and the SDLP, hitherto resistant, must accept welfare change would happen, just as it had happened in Britain. And he didn't feel it necessary to hang around at Stormont to labour the point. Here was a big change in style. Before, with the likes of Tony Blair, Gordon Brown, Bertie Ahern and Brian Cowen at the table, talks went beyond deadlines. This one didn't.

This was a different scenario: it was the first time in more than 17 years that Conservative-led and Fine Gael/Labour governments have been engaged in highwire talks. Previously, Sinn Féin and the DUP tried to manage the brinkmanship struggle: this time, Cameron and Kenny got their brinkmanship in first.

So, can the parties find compromise and agreement before Christmas? Right now that seems problematic judging by the words coming from the British government and Sinn Féin.

Adams was holding to the line that there must be no welfare cuts and Cameron was equally steadfast there could be no more cheque book negotiations. This is a very serious game of hardball.