Stormont ministers should not be surprised over the need to implement revenue-raising as part of a plan which led to the restoration of the powersharing executive, Chris Heaton-Harris has said.
The Northern Ireland Secretary told MPs that executive parties had accepted a financial agreement which included the stipulation for raising additional funds, adding: “Everyone knew what was in the package.”
The Treasury has offered to write off almost £600 million of Stormont debt, conditional on the Executive raising £113 million – the equivalent of a 15% regional rate increase – and producing a plan to deliver sustainable finances.
The stipulation is a key element of a £3.3 billion financial package drawn up by the Government to support the return of devolution in Northern Ireland.
However, the devolved administration’s joint leaders have rejected the demand to raise the additional £113 million of its own revenues in the coming financial year.
First Minister Michelle O’Neill has ruled out introducing a number of measures that could potentially generate the sum, such as a 15% rise on a portion of rates bills paid by householders in Northern Ireland.
During an appearance before the Northern Ireland Affairs Committee, Mr Heaton-Harris was asked by chair Sir Robert Buckland about the disagreement between the Treasury and the powersharing executive over revenue-raising.
Mr Heaton-Harris said the Government had offered an “unprecedented financial package”.
He added: “The Executive will need to make strategic choices about how it spends its money. It does need to live within its means and realistically I believe that will require some revenue-raising.”
SDLP MP Claire Hanna asked if Mr Heaton-Harris had raised revenue-raising with the parties in the negotiations prior to the return of devolved government.
He said: “I did. I think it’s fair to say they weren’t keen but they understood that it was part of this package.
“Part of the package is that there is some degree of revenue-raising and they accepted the package.”
Asked if the parties had agreed to revenue-raising, Mr Heaton-Harris said: “It is part of this package and everyone knew what was in the package.
“I believe we did (have agreement).”
Sir Robert asked if he was saying the powersharing executive should not be surprised by the need for revenue-raising.
Mr Heaton-Harris responded: “I don’t think they should be surprised.”
Alliance Party MP Stephen Farry asked if there was a danger of a stand-off between the Government and the powersharing executive over the £113 million.
Mr Heaton-Harris said: “I think the timeline is fairly explicit and revenue-raising was always part of this conversation.”