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The UK government has promised a £3.3bn rescue package for Northern Ireland when its executive returns and says months of talks with unionists to end a Brexit row that has paralysed the region’s politics are over.
London believes its bumper bailout will put the region’s distressed public finances on to a firm footing for the future.
But financial stability is only part of the picture and the Stormont power-sharing executive, which has been shuttered for nearly two years, remains stubbornly on hold into the new year.
Will Stormont return in January?
Sir Jeffrey Donaldson, whose Democratic Unionist party is Northern Ireland’s largest pro-UK political group, triggered a political crisis in the region when he pulled his first minister out of the Stormont power-sharing executive in February 2022 in a row over post-Brexit trading arrangements.
Brexit put a customs border in the Irish Sea that the DUP insists undermines Northern Ireland’s place in the UK and ability to trade with Britain.
While Chris Heaton-Harris, Northern Ireland secretary, said on Tuesday that “all the issues of substance have reached a conclusion” after eight months of talks, Donaldson insists there is still more work to do.
He is seeking legislation to fix the harm he says Brexit is causing but this will have to wait until parliament returns from recess on January 8.
All eyes will be on the window between that date and January 18, when Heaton-Harris faces a legal deadline to call (or again delay) fresh regional elections if the executive has not been restored by then.
Sean Haughey, a lecturer at the University of Liverpool, says Donaldson “will not want to be bounced” into a deadline.
While the DUP leader is widely believed to want to return to Stormont, some influential party members are pushing for him to hold out. Donaldson must win over his other 11 party officers and the 100-strong DUP executive.
Polls show DUP voters back his tough stance, despite the size of the financial package that a return to Stormont would entail: more than £1bn to stabilise public finances, a nearly £560mn write-off of Treasury loans contingent upon publication and implementation of a fiscal stability plan, and more than £600mn to transform creaking public services.
What happens if Stormont stays on hold?
Without an executive, the £3.3bn package — including nearly £600mn for public sector pay rises — will be unavailable at a time when Northern Ireland’s public finances are in crisis. Services have been slashed due to severe cuts by the civil servants in Belfast who are running the region in Stormont’s absence. The region already has the UK’s worst hospital waiting lists.
More than a dozen unions have called mass action for January 18.
“We are preparing a general strike for 18 January to force his [Heaton-Harris’] hand if he hasn’t delivered by then,” said Carmel Gates, general secretary of public service union Nipsa. London has ruled out releasing funds for public sector pay unless Stormont is back.
If Stormont is not restored, Heaton-Harris will face pressure to come up with a Plan B. London is reluctant to step in and take more decisions in the region — but Ireland has made clear it would also want a say if it did so.
Political deals in Northern Ireland have unravelled before, and the DUP could gamble that if it waits and Labour wins the UK general election expected next year, a new government might seek a closer relationship with the EU that could remove some of the checks on goods entering Northern Ireland from Britain — a major sticking point for the DUP.
Even if Stormont stays on hold, legislators face a scheduled vote late next year under the Brexit deal on key parts of the trade arrangements.
Can Stormont ever be stable?
If the DUP returns, “there is the possibility of three years of relative stability before the next [Stormont] election in 2027”, said Philip Wilson, a consultant at Flint Global.
The executive has been on hold for more than 40 per cent of the time since power-sharing was set up under the 1998 Good Friday Agreement that ended the three decades-long Troubles conflict.
Under its terms, the biggest parties from the nationalist and unionist communities each have a veto over Stormont. If one side pulls out, the executive automatically falls and “the more often these institutions collapse, the harder it is to get them going again and keep them going”, said Clare Rice, an independent political analyst.
The Alliance party, the third biggest in Northern Ireland, is pushing for an overhaul of the rules to prevent such recurrent collapses of the executive.
Westminster’s Northern Ireland affairs committee has also urged major reform in the coming years, including rebranding the first and deputy first ministers as joint first ministers and electing them via a supermajority of legislators.
But that would be require yet more tense negotiations.
