04 February 2016

The path to political “normalisation” has been a regular feature of debate about Northern Ireland over the past two decades, since the paramilitaries (mostly) laid down their arms and the main republican and unionist parties (mostly) committed to making a success of power-sharing and devolution. Akash Paun looks at the latest developments.

Huge progress has been made, but visiting Belfast and the grand old buildings of Stormont Estate, as I did last week, one is struck by the unique combination of “normal” politics and issues distinct to Northern Ireland’s troubled past that continues to shape how government works.

Having again teetered on the edge of collapse for over a year, devolution was saved in a November 2015 cross-party agreement that averted a return to direct rule from Westminster. This deal (the Fresh Start Agreement) was reached with heavy involvement from the UK and Irish governments, with the Northern Ireland Office demonstrating its continued importance as mediator and deal-broker.

The Fresh Start Agreement demonstrates how far politics in Northern Ireland has matured, and also how the shadow of the Troubles still looms. Flags, identity, culture, parades and the all-encompassing euphemism of “legacy issues” remain among the most divisive matters. Indeed, the one area where the parties openly admitted failure to reach consensus was on setting up new “bodies to deal with the past”.

For now, the Northern Ireland Office retains direct responsibility for such murky matters as identifying the remains of terrorist victims and legal cases relating to past violent acts. But more recognisable policy disagreements about welfare reform and money are also at the heart of Belfast’s recent governmental dysfunction.

Uniquely among the devolved nations, Northern Ireland runs its own social security system, but with funding flowing directly from the Treasury. In return, Northern Ireland is expected simply to replicate policy decided in Westminster for Great Britain (often with little prior consultation, I was told).

Refusal to implement the UK Government’s post-2012 welfare reforms led to gradually-increasing budgetary fines being imposed by the Treasury and, along with allegations of continued paramilitary activity, precipitated the 2014–15 crisis. These fines have now been stopped after the parties in Belfast agreed to allow Westminster to legislate directly to impose most of the reforms.

Meanwhile, significant sums totalling over £500m over four years have been earmarked by the Northern Ireland Executive for mitigating the effects of the reforms – for instance, to top up payments to people whose benefits are being reduced elsewhere in the UK, and to ensure that the so-called “bedroom tax” will not apply.

To facilitate the deal, the UK and Irish governments have also committed to providing additional pots of funding for issues including the integration of schooling, the removal of “peace walls” dividing protestant and catholic communities, and cross-border transport infrastructure. The Northern Ireland Executive will be given additional budgetary flexibilities as well, for instance to use its capital budget to fund redundancy payments in Northern Ireland’s disproportionately large public sector, which accounts for 26% of total employment (compared to 17% across the UK as a whole). Northern Ireland is also to gain the power to vary corporation tax – specifically to cut the rate from the rest of the UK’s 20% to the Republic of Ireland’s 12.5%.

In return for the relatively generous funding settlement, legislation will be passed at Westminster to impose a balanced budget requirement in future. An independent fiscal council will also be set up for Northern Ireland, to report on the devolved government’s fiscal position and spending plans.

With disaster averted, the country is now heading to the polls in May for elections to the Northern Ireland Assembly.

In another positive sign, officials and the parties are working on plans for a new programme for government to be introduced after the election, inspired by Scotland’s outcomes-based approach to social policy. But in Scotland, this operates in the context of a unitary structure with no departments in the traditional Whitehall mould. In Northern Ireland, departments are legally entrenched and allocated to the parties via a strict formula. So achieving the cross-departmental collaboration necessary to make this model work will be a bigger challenge, even though the number of departments is being cut.

As for the election, political continuity can broadly be assumed, since Northern Ireland’s power-sharing framework requires the largest unionist and nationalist parties (currently the Democratic Unionist Party and Sinn Féin) to govern together. However, parties can now opt to remain outside government and become conventional opposition parties, an option that may be exercised by the smaller Ulster Unionist Party or SDLP.

The survival of power sharing and devolution through a fairly serious crisis is a significant achievement. But the settlement remains fragile, due to continuing budgetary pressures and policy disagreements as well as the divisions of old. Is this just the new normal for Northern Ireland? Or, with a new generation of leaders gradually coming through, including a recent change of First Minister and SDLP leader, will Northern Ireland finally be able to consign “the past” to the past?