Northern Ireland

Welfare reform: Mike Penning warns 'clock is ticking' on NI financial penalties

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Media captionMike Penning said Northern Ireland had the best deal in the UK on welfare reform

Northern Ireland is facing financial penalties because of welfare reform delay and the clock is ticking, a UK work and pensions minister has warned.

Mike Penning visited Stormont to renew pressure on the executive to pass its Welfare Reform Bill.

He warned Stormont faces a penalty charge of £5m a month from January if the legislation is not passed.

Mr Penning said he was "frustrated" by the lack of progress and UK taxpayers could not continue to fund the delay.

The UK minister said his frustration was shared by the Social Development Minister Nelson McCausland, who is responsible for bringing the legislation through the Northern Ireland Assembly.


"I think he desperately sees that there is a need to get this through. There is a need to actually sort out the IT infrastructure that we need to supply for welfare benefits here in Northern Ireland, so he's frustrated, like I'm frustrated.

"The difference is, I've had to come here and say the UK government, the UK taxpayer, cannot continue to fund this. The welfare reforms need to come through."

Asked who was to blame for the delay, Mr Penning said: "I'm told Sinn Féin have been blocking it, if that's the case they really need to get their head together and see what's right for Northern Ireland, but that's not a matter for me.

"At the end of the day my job, as the welfare minister for the United Kingdom, is to come here and say 'you need reforms like we've done in the rest of the UK, we can't have a two-tier system, get the reforms through, but sadly if you don't there will be a deduction in your block grant'," Mr Penning added.

The UK minister said that the Treasury had written an open letter to Mr McCausland setting out how Northern Ireland had "the best deal in the United Kingdom" when it came to welfare reform, and promising help to implement the changes.

The reforms are being introduced at Westminster and include a new universal credit payment to replace child tax credit and housing benefit.

But the legislation is still going through the assembly at Stormont.

'As good as it gets'

It was pulled by Mr McCausland due to lack of agreement in April, before it could reach the Northern Ireland assembly's consideration stage.

Mr McCausland told the BBC on Wednesday that what was on offer from the Treasury was "as good as it gets".

"We have negotiated with Westminster to the very best of our ability; there are not going to be any further concessions from them, they've made that absolutely clear - we've got a good deal," he said.

Mr McCausland said penalty charges would lead to cuts in other departments, which he said was "something that is simply the result of the inability of Sinn Féin to tackle the issue".

The DUP assembly member accused Sinn Féin of "burying their heads in the sand".

"Month after month, week after week at the executive, I raise the issue and they try to pretend that it's going to go away," he said.

Sinn Féin MLA Alex Maskey, who sits on the assembly's social development committee, said: "The reason why we put our foot down is because we are opposed to these Tory-led cuts being imposed on people here."

He added: "The British government tell us the impact of the bill - that Nelson McCausland wanted to put forward without any changes - will take £450m per annum out of vulnerable people's pockets.

"That is a dilemma that we have to face up to - the collective responsibility that we all have is not simply to kowtow to what London wants us to do."

Lost savings

The Treasury has said the financial implications of delays to Northern Ireland implementing reforms equate to about £5m of lost savings every month.

It has said that unless the reforms are introduced in Northern Ireland, the block grant will have to be reduced in order to compensate for lost savings.

There have been claims that the financial impact is greater in Northern Ireland than other parts of the UK because of the large number of people who claim Incapacity Benefit (IB) and Disability Living Allowance (DLA).

The Welfare Reform Bill marks the biggest overhaul of the benefits system since the 1940s.

Mr McCausland has also said the Northern Ireland Executive received £6.5bn from the Treasury through tax credit and social security, with the contribution from the National Insurance Fund in Northern Ireland amounting to £2.5bn.

He warned that should the executive fail to agree welfare reform and therefore break with GB parity there was a "potential £4bn" shortfall for Northern Ireland's budget.

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