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British Treasury warning letter to Stormont

Finance minister Arlene Foster. Picture by Mal McCann
David Young

THE British Treasury has given the Executive a formal warning that it is getting ready to take control of its finances if the budget crisis is not resolved.

Chief Secretary to the Treasury Greg Hands has written to Finance Minister Arlene Foster, making clear that an intervention would happen if the budget stalemate continues.

First Minister Peter Robinson said if the Assembly collapses, it would be "years" before the DUP would be prepared to enter another power-sharing government. He claimed Northern Ireland would therefore come under direct "Tory rule".

But Sinn Féin's Conor Murphy blamed Tory cuts for the north's budget problems.

Stormont has a £600 million black hole in his finances, partly due to the failure to implement welfare reforms.

Mr Robinson said Mr Hands' letter put Mrs Foster on "formal notice" that the Treasury believed the Executive was going to breach its spending control totals and such a scenario would be "unacceptable".

He said it went on to warn that the Treasury was "starting to take preparatory action to intervene in our financial matters".

The DUP leader added: "Effectively, that means the Treasury will be taking over decisions about spending in Northern Ireland, and I think if we reach that situation then we are just a matter of probably days away from the collapse of the Assembly when that happened."

In the event of collapse, fresh Assembly elections would be called. But a new administration would only be formed if the two biggest parties emerging from the poll agree to lead a new Executive together.

Mr Robinson made it clear that the DUP would not come back to work in the same "not fit for purpose" system.

"If we had an election tomorrow we are not going back to anything," he said.

While initially voicing support for the landmark Stormont House Agreement, Sinn Féin later withdrew backing for welfare reforms amid fears they would hit the most vulnerable.

The SDLP is also opposing the welfare reforms.

Sinn Féin assembly member Conor Murphy said "swingeing Tory cuts" were responsible for the difficulties facing the Executive's budget.

"It is hardly surprising the British Treasury is predicting that the Executive may exceed its budget given the fact the Tories have raided £1.5 billion from our block grant," he said.

"And this week the British Chancellor, George Osborne, promised more cuts to the income of working families and a further £20 billion cuts to public services.

"The difficulties facing the Executive have been created by the Tory Government's ideological commitment to austerity and cuts.

"Austerity isn't working. The Executive requires sustainable and workable finances so we can invest in and grow our economy.

"The Executive parties need to stand up together and face down this Tory onslaught on our public services and the most vulnerable."

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