The best thing Varadkar could do for Stormont is to lay off Sinn Féin

Balancing Stormont’s budget is not just about money. It is being seen as a test of the new Executive’s ability to make difficult decisions. The British government appears to be setting this test, insisting Stormont raises revenue or finds cuts of £113 million (€132 million) to unlock a wider financial package.

This is such a trivial fraction of the package’s overall worth – 3 per cent of its upfront cash, not counting billions more in guaranteed annual funding – that it looks like a demand to take some token responsibility for Stormont’s giveaways.

Households in Northern Ireland pay half the local taxes of counterparts in Britain while receiving £700 million of extra services, most notably free water, prescriptions and domiciliary care, half-price university tuition and enhanced social security.

It might seem as though the Executive has already failed the test. One of its first acts was to send a letter to UK prime minister Rishi Sunak, signed by every Stormont minister, saying the financial package was insufficient. The letter mentioned revenue raising but did not concede to it.

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Separately, Sinn Féin’s First Minister and economy minister have ruled out water charges and higher tuition fees, while the DUP Deputy First Minister has ruled out higher charges for households in general. Both parties say they cannot ask people to pay more for declining services during a cost-of-living crisis, although Northern Ireland’s middle-class is far from struggling and could contribute more to saving those services.

It is too soon to make a judgment, however. The Executive is in the early stages of a negotiation with the British government and digging in its heels is entirely rational. London improved its offer significantly in December when the DUP refused to budge and it has signalled further improvement is possible, although it is digging in its heels on the £113 million of revenue raising.

There are legitimate reasons to contest the package, generous though it may be. The £3.3 billion lump sum does not cover all the public sector pay issues it is meant to solve. Stormont has to repay debt artificially imposed to embarrass the DUP during its recent boycott. A new “fiscal floor” for Northern Ireland, guaranteeing public spending per head will always be a quarter higher than in England, is based on a Welsh formula that does not account for security costs and may have used an unrepresentative baseline year.

In a letter to the UK Treasury this week, Sinn Féin’s finance minister said all this should be considered as part of a properly worked-out economic plan, instead of rushed through under duress. This is not an unreasonable point, even if these issues have been discussed for years.

The consensus between the Executive parties could be viewed as a positive sign. A cynic might say it shows they can always agree to ask for more money.

Sinn Féin was never going to introduce water charges, and there are other ways to fund investment in the water system. Ruling out higher tuition fees is a more ominous sign of lack of resolve.

Because Stormont subsidises fees it has to limit student numbers, with disastrous consequences. Universities and business leaders have begged for an end to this regressive policy. Sinn Féin may be thinking of the UK’s Liberal Democrats, destroyed a decade ago after breaking a pledge not to raise tuition fees in England.

If the united front between Sinn Féin and the DUP breaks down it could fracture in a novel direction. The DUP unexpectedly chose education instead of finance when the Executive was formed, putting Sinn Féin in charge of all the key departments of economic management, while unionists control major spending departments.

Critics of the DUP who said it would never play second fiddle to republicans could not have been more wrong. By accident or design, it has positioned itself so it can blame Sinn Féin for not giving its ministers enough money.

In Belfast two weeks ago Taoiseach Leo Varadkar said his Government is willing to contribute more to Northern Ireland through the Shared Island fund, in co-ordination with the Executive and the Northern Secretary, but this cannot realistically plug gaps in Stormont’s budget. The best contribution the Government could make might be a ceasefire on potshots at Sinn Féin.

When Mary Lou McDonald’s party ducks difficult decisions in the North, southern rivals accuse it of populism. When it takes unpopular decisions, these are highlighted to southern voters as a warning. When it adopts different policies north and south, as circumstances warrant, it is accused of inconsistency.

There is little evidence the southern electorate notices or cares, yet Sinn Féin can be concerned enough to delay or obstruct business at Stormont. Certainly, no radical budget decisions are likely until the Republic’s council, European and general elections are out of the way.