Sinn Féin in Assembly call for fiscal freedom

Sinn Féin Assembly ministers speaking outside Stormont

By Laura Friel

Stormont Assembly resumed business after the summer recess this week with Sinn Féin seizing the initiative with a call for increasing fiscal freedom from the British Treasury.
A motion calling for a greater degree of economic autonomy asked the Assembly to support the transfer of tax varying powers to the Executive, along with the establishment of a borrowing facility. Such measures would be in line with powers already conceded by the British Exchequer to the Scottish parliament.
It was, by any standard, a modest proposal but having already flagged up their decision in the Belfast Newsletter to “get tough” with Sinn Féin, the DUP opted for political rant over reasoned consideration, accusing Sinn Féin of “Marxist ideology” before collapsing into sound bite provocation.
Describing the motion as “probably the most important debate that the Assembly will have – not just today but any day,” Sinn Féin's Jennifer McCann said control over local taxation and the level of fiscal freedom secured by the Assembly was a key issue. Local politicians should be the people driving forward the agenda for change not British Treasury ministers, argued McCann.
“Sinn Féin is not alone in seeking much greater fiscal freedom through tax varying powers and the development of an Executive Borrowing Facility. These fiscal freedoms would unlock our potential to set our own funding priorities. They would be an essential component in developing a radical plan of action to tackle deprivation and ensuring long-term economic development,” said McCann.
The level of fiscal freedom underscored the ability of the Assembly to address many of the important issues facing people in the North. Key issues such as water charges, the review of rating, the Varney Review, industrial de-rating and the use of private finance for public investment depend on the ability to utilise available financial resources, said the West Belfast MLA.
Speaking to the motion Sinn Féin's Mitchel McLaughlin expressed the hope that members of all the parties would put behind them the old politics whereby the issue of which party had sponsored the proposal under consideration had the effect of pre-determining either support or opposition.
“Surely we have now grown up and emerged from the travails of a deep seated conflict with a more mature and pragmatic approach,” said McLaughlin.
There is a clear consensus emerging that recognises the biggest barrier to building a sustainable economy in the north of Ireland is the fact that fiscal policy, taxation and public expenditure are all determined in London, Sinn Féin's Mitchel McLaughlin told the Assembly.
“Economic policy that is designed and administered by Whitehall will always be delivered for the benefits of the island of Britain with inadequate consideration of the special needs of the people of the North,” said the Derry MLA.
The needs of people living in the north of Ireland will always be peripheral and coincidental to those of Britain unless the current situation changes. McLaughlin highlighted the double disadvantage undermining economic development in the North.
“We are excluded from the economic advances of the rest of Ireland because we are locked into the ‘one size fits all’ approach by the British Treasury that forces us to work within the parameters of an inadequate, unfair Barnett Formula and a privatisation agenda which has been imposed by politicians who are unaccountable to the electorate of the North,” said McLaughlin.
The Barnett Formula is a population-based mechanism designed to encourage convergence within regional spending patterns but the application of which ignores crucial structural and historic differences. It therefore has an inbuilt dynamic that reproduces existing inequalities rather than addressing them.
“Not only do Westminster based politicians take no account of the higher cost of living here, neither is there any special provision for the fact that we are a society emerging from conflict with all its attendant social and economic disadvantages,” he said.
McLaughlin argued that Executive Ministers needed a more realistic mechanism for calculating the Block Grant that would take these factors into account and ensure the allocation of funding on the basis of need and a fairer distribution of resources.
“All of the parties in debates during the Programme for Government consistently supported the introduction of tax varying powers to grow the regional economy, to develop and target tax incentives towards areas of high unemployment, to encourage small businesses and to enable other specific sectors such as social economy initiatives,” said McLaughlin.
But cross-party consensus within relative privacy was not to be re-enacted by a camera shy DUP, who had decided their priority was to respond to a summer of criticism from fellow unionists for “cosying up” to Sinn Féin.
It was “no-way” rather than “never, never, never” but vintage DUP nevertheless. DUP MLA Simon Hamilton declared it was no surprise that “a tax and spend, left wing party” would table such a motion.
“Sinn Féin's Marxist ideology is an indicator of their intentions. They are asking to empower the Assembly to pilfer even more of people’s hard earned income. People in this country are already paying enough tax without local politicians trying to help themselves to more of their income,” said Hamilton.