Today the Chancellor of the Exchequer makes his Autumn Statement.
There seems to be a little more financial headroom available than previously understood, yet this can be illusory as much of it is linked to inflation.
The Autumn Statement comes at time of persistent cost-of-living pressures, and growing reliance on food banks and other emergency interventions. The Chancellor should be looking to the poorest households and investing in a Green New Deal.
I have written to the Chancellor to urge for a range of specific interventions.
He must honour the long-standing commitment to uprate benefits in line with the September inflation rate, rather than October when inflation fell off considerably. The latter would be an attempt to save considerable sums on the back of the most vulnerable. The general level of Universal Credit should be increased to better ensure it enables every household to afford the basics.
Renewed energy support for households this winter, and a specific social energy tariff for struggling households, is required. We also have urged for the removal of the two-child limit, as well as additional child support for families through enhanced tax-free childcare.
Alliance wants to see the pensions triple lock protected to safeguard the interests of pensioners. State pension levels in the UK are some of the lowest in western Europe.
In a different political context with a restored Executive, this Autumn Statement could have been the moment where assistance of our perilous public finances was announced. There are two key interventions required.
The first is the creation of a fiscal floor, to ensure we are funded in accordance with our relative social and economic need. A fiscal floor would essentially mean the level of funding provided by the UK Government for Northern Ireland would be higher than at present and would be guaranteed not to fall below a set level in the future.
Currently, Northern Ireland is structurally underfunded by between £300m and £400m per year relative to the level with an appropriate fiscal floor in place. This would have exceeded the Executive overspend last year.
The precedent for this has already been set by the fiscal floor provided for Wales in 2015, guided by the Holtham Commission. A fiscal floor could be put in place in Northern Ireland quite quickly, especially on an interim basis.
The Fiscal Council suggests the level of 'relative need' in Northern Ireland is now at least 124 per cent of that in England. However, we are concerned when policing and justice spending was factored in, it used the 2017-2022 period.
Alliance believes the period from 2010-2015 is a more appropriate, as spending was ring-fenced then. Professor Holtham recently endorsed our view at the Northern Ireland Affairs Committee.
This could move the assessment of need from 124 to our current estimate of 127.
The second element is an Invest to Save Transformation Fund. Northern Ireland’s public services need reform to both make them more sustainable and to produce better outcomes. However, this can’t be done from a burning platform of cuts and more cuts, which is the current trajectory.
Alliance has been lobbying the UK Government for a financial package over the course of this year.
Lessons must be learned from the poor implementation of previous financial packages, and some degree of conditionality will be a reality.
This is not about compounding Northern Ireland’s existing economic under-performance or financial dependency.
Rather what the region needs is the opportunity to restructure and rebuild, a renewed ability to invest to reduce the costs of division, enable efficiencies and deliver value-for-money outcomes.
