Northern Ireland

Stormont is mature enough to handle devolution of tax powers - Conor Murphy

Finance Minister Conor Murphy (right) with Fiscal Commission chair Paul Johnson.
Finance Minister Conor Murphy (right) with Fiscal Commission chair Paul Johnson. Finance Minister Conor Murphy (right) with Fiscal Commission chair Paul Johnson.

THE devolution of policing and justice powers show the Executive would be politically mature enough to handle new tax powers, the finance minister has said.

Conor Murphy was speaking after the Fiscal Commission for Northern Ireland published its final report after spending a year examining whether Stormont could be granted more fiscal levers beyond property rates.

The independent body of academics and economists recommended a partial devolution of income tax, where the Assembly could control rates and potentially tax bands, but with the administration still carried out by HMRC.

The commission has also backed the devolution of stamp duty land tax, landfill tax and air passenger duty.

It’s unlikely to happen before 2027 at the earliest, but commission chairman Paul Johnson said the political stalemate in the north could push the timeline further down the road.

The economist said the political capacity of the Executive had consistently been raised throughout its research.

“We’ve also heard the other view which is this will help create the maturity that’s needed,” he said.

“It’s hard to think why this would be more problematic then the very extensive spending powers the Northern Ireland Executive has got.

“Taxes, once the policy is set, it’s a much more automatic thing than running the NHS,” he added.

“Understanding the trade-offs between spending and taxation and might provide more maturity to the situation as a whole.”

Conor Murphy said similar arguments were made in 2006/07 over the Executive’s capacity to handle new policing and justice powers.

“Some said the Assembly and the Executive weren’t mature enough to handle these powers, because they were too great for us.

“Policing and justice powers were transferred and it’s probably one of the least contentious departments that we have in the Executive,” he said.

“I think we can take mature decisions around some of those issues and build on the experience of Scotland and Wales, and obviously talk to Treasury to get the benefit of experience there.

“We’re almost 25 years into devolution. Wales and Scotland have gone through his on a number of occasions and have had additional powers transferred to them, which they have used to the benefit of Welsh and Scottish people. I think we should be doing the same.”

Meanwhile, Mr Murphy said the pot of money left unspent at Stormont due to the ongoing political stalemate now stands at £421 million.

He said the extra money cannot be spent on new schemes without Executive approval.

A draft three-year budget along with £300m in unallocated funding from the UK Treasury was left on the Executive table when Paul Givan resigned as first minister in February as part of the DUP’s protest over the Northern Ireland Protocol.

The finance minister said: “When Treasury tidied up their books at the end of the year, there was actually more money due to us and that has topped it up to £421m.”

DUP leader Sir Jeffrey Donaldson argued during pre-election TV debates that other avenues existed to allow the money to be spent.

But Mr Murphy said: “The legal advice is very clear both from the solicitors and from the attorney general. The DUP know that as well as I know it.

“I would have to ask officials to break legal advice, and for me to take a decision which is cross-cutting, would be contrary to the ministerial code.

“Even if you got an Executive in place, we may not have time to fully spend it and we could end up giving money back at the end of the year.

“There really is a high degree of urgency to get an Executive in place very soon."