Sam McBride: Childish populism at Stormont ultimately hurts the very voters they are trying to woo – Belfast Telegraph

Alliance deputy leader Stephen Farry once summed up Stormonts financial ideology as having two components: a left-wing spending policy alongside a right-wing taxation policy.

very problem was the fault of the Treasury not sending enough money for public services, while most politicians in Belfast boasted to constituents about how they had lowered their taxes.

The devolved administration set up after the 1998 Belfast Agreement was never designed to provide good government and some defenders of the Stormont experiment argued that in time politics would mature; having to make difficult decisions would force ministers to build cross-community alliances and to grapple with problems beyond the orange and green divide.

Such optimism has been unfulfilled. Devolution has now been back for almost two years, yet there is little evidence of any willingness to take unpopular decisions even when some politicians privately concede that they are necessary.

This week Chancellor Rishi Sunak announced his spending review a medium-term allocation of resources to public services which allows the devolved administrations to plan ahead. Stormont Finance Minister Conor Murphys response demonstrated the shallowness of his thinking about the public finances. But in truth, his mindset is shared to varying degrees across much of the Assembly chamber and in parts of the civil service.

The chancellor announced that Stormont would receive its largest budget in history, with increased spending for every one of the next three years. By 2024, the Executives budget will have risen to 15.2bn. The government said this amounted to an additional 1.6bn a year on average over the three-year spending review period.

Those figures do not include Annually Managed Expenditure which sees roughly another 10bn sent to Northern Ireland to pay for things like pensions and social security. If Northern Ireland was an independent country, it would be bankrupt because there is a multi-billion pound shortfall between what is raised in tax and what is spent on public services.

But as far as Mr Murphy is concerned, this is no cause for thankfulness. The Sinn Fein veteran said the extra money was nowhere near what is required. He disputed the claims of a 1.6bn increase in the block grant, highlighting that this did not account for the vast Covid spending over the last year and a half.

In that, he had some justification the Treasury was using Stormonts pre-pandemic budget as its baseline. Like every government, the Executive is going to face enormous bills over coming years, some of which cannot yet be foreseen although last year the Executive was struggling to spend all the money which the Treasury sent to deal with Covid, and the pandemic has shown that if there is a crisis the Treasury will provide additional funds.

However, there is a more awkward truth for Mr Murphy and many within the Stormont system. They have the ability to act out their left-wing economic ideology, but they are declining to use that ability.

Sinn Fein has long complained that Stormont does not have enough tax-raising powers, and Mr Murphy has set up an inquiry to examine the case for further fiscal devolution.

Yet, despite seeing itself as in the same economic category as Castro and Chavez, there is scant evidence that Sinn Fein would use any additional tax-raising powers to tax the rich.

Indeed, the partys one big economic idea (parked for now) has been to devolve corporation tax so that it can slash taxes for the biggest corporations. To put into context how ideologically absurd that is for a socialist party, consider that this Tory chancellor is increasing corporation tax.

For years, Sinn Fein and the DUP boasted about the taxes they had spared the people of Northern Ireland. The regional rate had been frozen year after year, water charges had been blocked, there had been a cap on the rates which the wealthiest homeowners had to pay, and so on.

The cap on rates bills is an example of how economically conservative successive administrations led by the DUP and Sinn Fein have been.

A condition of the 2006 St Andrews Agreement was that there would be a cap on rates bills, set at half a million pounds meaning that anyone with a house worth more than that sum would not pay any extra in rates. Two years after the restoration of devolution in 2007, the cap was lowered to 400,000 and it has remained there ever since.

In simple terms, that means that the poorest ratepayers subsidise the bills of the most wealthy (who include among their number some Stormont ministers and senior civil servants). The most expensive house for sale in Northern Ireland is a huge five-bedroom mansion on Malone Park, valued at 2.5 million. Its annual rates bill is listed by the PropertyPal website as being just 3,187 a year.

That is the consequence not of decisions taken by Tories in London, but by DUP and Sinn Fein finance ministers, backed by the vast majority of MLAs.

Based on the current level of rates, removing that cap would bring in about 8 million a year equating to the salaries of about 300 nurses (or 65 First or deputy First Ministers).

Most of the Executive parties doggedly opposed water charges, presenting them as a cynical attempt to over-tax the poorest in society. Yet they have the chance to set the rules as they see fit. If they want to see redistribution of wealth an ideology to which Sinn Fein and the SDLP subscribe then charges could be set for those in the biggest houses. There are arguments against that, but to claim that the Executive has no ability to raise the money it claims to need is demonstrably false.

One of the few areas in which Stormont has used its powers to raise some of the money which it says it needs is through the carrier bag levy.

But the rate was set at a paltry level 5p a bag and has never been increased (Edwin Poots is considering increasing this to 20p a bag). If it wanted, the Executive could massively increase that charge, something which would not only bring in money, but would help to protect the environment.

Stormont is also on course to hand back hundreds of millions of pounds in money to subsidise renewable heat because of its bungling over RHI first making it too generous, now making it insufficiently generous in comparison with GB.

For every 100 spent per person on comparable public services in England, the Treasury calculates that 127 is spent in Northern Ireland. There is good reason for a region like Northern Ireland receiving more money almost every UK region raises less than it spends, reflecting the financial power of London. Other parts of the country contribute in other ways. Northern Ireland, for instance, is a major food producer.

The Treasury has poured money into the Executive. Almost every time there has been a political crisis, there has been a financial reward for the parties which caused that crisis. In line with that principle, last years New Decade, New Approach deal was accompanied by an additional 1bn.

Alliance is the only major party to have opposed this populism. I recall a very senior DUP figure coming up to me many years ago after a pre-election debate in which the then Alliance leader David Ford had set out his support for water charges. The politician was ecstatic, believing that this would undermine Alliance with voters who dont want to pay anything more.

But in some ways it was easier for Alliance to make those arguments when a vote for its candidates was not going to see such policies implemented. As it grows, that may no longer be the case, and there will be a test of the unresolved economic ideology of a party whose central focus is not economic.

Its easy to demand that London sends us more and more money, but its not grown-up politics and as the cash for ash scandal demonstrated, it can have perverse outcomes.

If we want a better health service, are we prepared to pay for it both financially and in terms of unpopular but necessary decisions about centralising some services away from small hospitals? No one enjoys paying tax, but lower taxes come at a cost.

However, higher taxes do not necessarily mean better public services. Boosting public spending ultimately means taking the money from the public; that can only work if the public trust that the money will be well spent.

Having been notorious for squander and incompetence, the Executive is not best placed to convince voters to give it more of their cash.

And yet, without ever taking the responsibility for raising more of the money which they say public services need, our politicians will remain infantile and our health service, our water infrastructure, our schools and myriad other aspects on which we depend will require ever greater reform and someone will have to pay for it.

Huey Long, the 1930s governor of Louisiana, once said: One of these days the people of Louisiana are going to get good government and they arent going to like it.

One of the things which the DUP and Sinn Fein must worry about is this: If despite their relentless populism for 14 years, Stormont is deeply unpopular, how precarious would their positions be if they were to take unpopular decisions?

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Sam McBride: Childish populism at Stormont ultimately hurts the very voters they are trying to woo - Belfast Telegraph