DUBLIN — What’s the price of peace? For Northern Ireland’s warring politicians, the answer is often surprisingly simple — a cool £1,000,000,000.
A half-dozen senior insiders in the British government and Northern Ireland civil service have told POLITICO that Westminster is mulling a £1 billion offer to boost the region’s public services if its main political parties restore a power-sharing government before the end of the year.
The deal would mark the third time in seven years Westminster has ponied up £1 billion to get the fractious Northern Irish parties back on side — but is still seen as a price worth paying to break the yearlong political deadlock.
“When you look at previous points in our history where there have been crises, there has always been money to sweeten the deal,” said David Sterling, the former head of the Northern Ireland Civil Service, who retired in 2020.
“I’m sure that the parties are pressing hard for something like that at the moment.”
Such a deal would form part of a wider carrot-and-stick approach by London, after Northern Ireland Secretary Chris Heaton-Harris on Thursday imposed immediate cuts on most of the region’s government departments, creating a nightmare for public servants already struggling to maintain health, education and transport services in the most state-dependent corner of the United Kingdom.
Officials in Heaton-Harris’ Northern Ireland Office and the senior civil servants tasked with actually delivering the cuts bitterly disagree on the tactics being deployed — but privately foresee the same end game: a new political accord that coaxes the Democratic Unionist Party back into government with their Irish republican opponents, Sinn Féin.
“The secretary of state sees value in inflicting pain in the short term to achieve the necessary gain in the medium term,” said one of Northern Ireland’s 10 permanent secretaries — the departmental heads tasked with reluctantly wielding the budgetary axe in lieu of an elected assembly.
“We don’t accept being ordered to take decisions that, frankly, he needs to take himself.”
Heaton-Harris argues that the only way for British unionist and Irish nationalist leaders to manage the coming financial pain themselves will be to grab back the reins of power and revive their cross-community executive, the central goal of the American-mediated Good Friday Agreement of 1998.
And he did not quash behind-the-scenes chatter that any such breakthrough will be accompanied by a special financial sweetener — a well-established pattern dating back to the earliest days of power-sharing a quarter-century ago.
“The purpose was not to punish anybody with this budget. The purpose is to make sure public services can continue in the absence of an executive,” Heaton-Harris told reporters after meeting the leaders of the DUP, Sinn Féin and three other parties at Hillsborough Castle outside Belfast.
“I do want to see an executive up and running, and that’s why I continue to have talks with DUP representatives,” he said.
The Democratic Unionists collapsed the executive last year, in protest against post-Brexit rules agreed between the U.K. and EU which make it easier for Northern Ireland to trade with the neighboring Republic of Ireland than with the rest of the United Kingdom.
When asked what the U.K. government might offer the DUP as an enticement, Heaton-Harris said: “Let’s see where [the talks] lead to.”
Heard this one before?
Certainly, the DUP are no strangers to trading raw power in return for hard cash for the region.
The party won a previous £1 billion bonus for Northern Ireland as part of its 2017 confidence-and-supply agreement to prop up Theresa May’s minority government at Westminster.
And the U.K. government paid much the same again as part of its “New Decade, New Approach” deal to revive power-sharing at Stormont in 2020, following a previous three-year breakdown.
Both offers were dwarfed by the granddaddy of them all: the 2007 breakthrough deal that persuaded the DUP to end its historic refusal to talk with Sinn Féin and form their first coalition with age-old enemies. Then-Prime Minister Gordon Brown pledged that Northern Ireland — a country the size of Connecticut, with fewer than 2 million residents — would get a staggering £51 billion over the coming decade if the DUP agreed to play ball.
This time Heaton-Harris and his junior NIO minister, fellow Brexit enthusiast Steve Baker, are playing hardball in public, insisting the U.K.’s own overstretched finances mean Northern Ireland can’t expect another bonanza.
Baker said Northern Ireland already was draining U.K. finances unfairly in comparison with Scotland, Wales and particularly his home nation of England. “Northern Ireland gets about 20 percent more per head than England and my constituents. That’s difficult for me to sell to my voters,” he said.
When asked about his own officials’ speculation that a £1 billion enticement could be offered to a reformed Stormont executive, Baker said any extra finance must be tied to long-postponed structural reform, particularly increased or new charges for services currently offered for free or at a discount rate in Northern Ireland.
“These kind of paydays have not served Northern Ireland well in the long run. They’ve allowed reforms to be put off,” Baker said. “We’re not going to solve them with bungs of large sums of cash, which haven’t worked in the past and would be difficult to defend in the rest of the U.K.”
Yet that scenario has been quietly explored for weeks in talks involving the NIO, Stormont civil servants, the DUP and Sinn Féin, officials in all four groups told POLITICO.
And while £1 billion sounds like an eye-watering sum, officials say the only way to prevent Northern Ireland’s already creaking public services from getting even worse is to raise budgets in parallel with inflation, which across the U.K. has remained stubbornly above 10 percent. The Northern Ireland Fiscal Council — supposed to be advising the non-existent Stormont executive — estimates this means hiking expenditure by more than £800 million this year, simply to stand still.
Sterling’s successor as civil service chief, Jayne Brady, wrote privately to the NIO this week warning that spending cuts of this scale would “cause enduring harm” and were “simply not deliverable.” Reflecting widespread unease at Stormont, her letter was immediately leaked to the press.
Heaton-Harris’ plans would involve cutting spending for seven of the nine government departments, and hiking the largest budget — health services — by only 0.3 percent. Education, the second-biggest expense, is to be cut by 2.4 percent, which union chiefs say makes teacher strikes all but inevitable.
Sinn Féin’s former finance minister for Northern Ireland, Conor Murphy, left Hillsborough on Thursday denouncing Heaton-Harris’ cuts as “immoral and indefensible.” The Democratic Unionists condemned the cuts as “a hammer blow” to schools, and said politicians were treating impoverished youth as “pawns.”
Yet, as he left the castle, DUP leader Jeffrey Donaldson struck a markedly relaxed tone, describing Heaton-Harris’ budget constraints merely as “temporary arrangements.”
As ever in Northern Ireland, a backroom deal could yet be just around the corner.
