Examination of Witnesses (Questions 1-19)
RT HON
PETER HAIN
MP, MR JONATHAN
PHILLIPS AND
MR NICK
PERRY
26 OCTOBER 2005
Q1 Chairman: May I welcome you most warmly,
Secretary of State, together with your team. This is the first
formal public meeting of the new Northern Ireland Affairs Committee.
We have already visited Northern Ireland. We are very grateful
to you and your officials for the help which has been given with
those visits. However, one of the prime duties of the Committee
is to hold the Government to account and to ask you and your fellow
ministers from time to time to come before us and answer questions.
Today we are going to be dealing with the political and security
situation in Northern Ireland and we are very grateful for the
memo which you submitted yesterday. Thank you very, much for that.
We can announce that the first major inquiry of the Committee
will be into the nature of organised crime in Northern Ireland.
We thought you would like to know that. Before we move on, would
you like to introduce your team?
Mr Hain: Thank you. First of all,
may I thank you for inviting me to address the Committee and rather
than making an opening statement, I have preferred to put in a
memorandum to leave more time for you to grill me. My political
director, soon to be permanent secretary, is Jonathan Phillips
and Nick Perry is in charge of security; two senior officials.
Chairman: Gentlemen, you are both very
welcome. Yesterday you did make an announcement, not on this particular
subject but on rather an important one and one member of the Committee
would like to start by asking you a couple of questions on that
budget announcement. I am sure you are more than adequately prepared
to answer it.
Q2 Sammy Wilson: The budget announcement
yesterday was obviously a major event in Northern Ireland and
a massive impact on people within Northern Ireland, especially
given the fact that the rate increase which you announced was
well over the rate of inflation, was well above the 8% plus inflation
which the old Northern Ireland Assembly had indicated would take
place on a year to year basis, yet this announcement did not take
place in the House. There could probably have been an opportunity
in about two weeks when it could have come to the Grand Committee,
where there could have been an opportunity to ask questions about
it. Why was the announcement made in the way it was, especially
given the significance to people in Northern Ireland and to the
economy in Northern Ireland?
Mr Hain: As the honourable Member
for East Antrim knows, the tradition in the last few years since
the Assembly has been suspended is for the announcement to be
made by the Finance Minister in Northern Ireland in exactly the
same way that I did yesterday, rather than to do it in the form
of a Parliamentary Statement. We have actually put copies in the
Vote Office and in the Library. With hindsight, I think it would
have shown better courtesy to the House to have notified party
leaders and placed it in the Library and the Vote Office yesterday
and I apologise for that. It is certainly undoubtedly a very important
statement and it announces huge big investment increases for Northern
Ireland: £450 million going into health in additional money
in the next couple of years, £50 million more than the previous
draft budget. This is of course a draft budget and when the final
budget is announced that will obviously have to be laid before
the House. It is £450 million of new health spending, £100
million in education, £20 million greater than previously
budgeted for. In terms of the rates increase, which I agree is
above the norm, it is to fund three new ring-fenced funds: one
for childcare, extending childcare on a massive scale, both enabling
parents to work and enabling children to get quality before- and
after-school care; secondly, investment in skills and science,
crucial for Northern Ireland's competitiveness; thirdly, investment
in renewable environmentally friendly energy. When you look at
the rates increase you see two things: first of all it has gone
to fund essential priorities to take Northern Ireland forward.
Secondly, we are dealing with a situation where the average Northern
Ireland household rates and water total is £546; in England
and Wales it is £1,275. A modest increase of one pound per
week, admittedly on a high percentage, is a way of Northern Ireland
paying its own way in a way that English council taxpayers and
taxpayers will recognise, but also, crucially, doing things we
cannot do otherwise. If you take away that money, we cannot invest
in childcare, cannot invest in science and skills and cannot do
the work necessary to have clean energy in Northern Ireland.
Q3 Sammy Wilson: You make the comparisons
between Northern Ireland and other parts of the United Kingdom.
You do not recognise there of course that first of all average
incomes are lower in Northern Ireland and, secondly, that in Northern
Ireland we do suffer from higher costs in terms of energy et cetera
and that does have to be borne in mind. Given that this was a
radical departure from the previous policy, was any equality impact
assessment done as to how this is likely to affect particular
groups, especially those vulnerable groups under section 75?
Mr Hain: As you know, really vulnerable
groups, those on the lowest incomes, do not pay this; they get
a benefit which actually means they do not pay it. Secondly, when
you look even at those on average incomes, which should properly
concern the honourable Member as a locally elected representative,
you are talking about one pound a week. I think most people will
say, particularly given the imbalance between the £500-odd
and £1,200-odd between Northern Ireland and Great Britain
. . . I am not saying that the Government's intention is to equalise
that figure, partly for the reasons you have mentioned, but I
am saying that a fairer contribution should be paid actually to
get the quality of public services which are needed in Northern
Ireland, including these priorities which we could not otherwise
have done on the old budget.
Q4 Sammy Wilson: How much is it expected
that we will raise by the above-inflation increase?
Mr Hain: It is around £38
million and that will go significantly to help fund big increases,
though not on its own: £25 million in each of the next two
years on childcare, £15 million and then £20 million
on tackling youth unemployment and skills training and £5
million next year, £10 million the year after alongside £10
million and £25 million capital investment on research and
development on renewable energy. There is a choice. If there were
a devolved administration, which I hope there will be, and the
honourable Member may well be able to take a seat on it, then
the decisions themselves could be made by that devolved administration.
The sooner the parties, including the DUP, negotiate with their
fellow parties and make these decisions themselves rather than
relying on me and my ministerial team to take them, the better.
Q5 Sammy Wilson: Is this a kind of
stick to beat us back into Stormont?
Mr Hain: No, it is not: it is
doing what is needed for Northern Ireland. I would not have thought
any elected representative would quarrel with any of those priorities.
They were things not being done in Northern Ireland; they are
being done in Great Britain. I think Northern Ireland should be
world class as well.
Chairman: Thank you very much for that
and thank you for your apology and recognising that the announcement
could perhaps have been made slightly more sensitively.
Q6 Lady Hermon: Secretary of State,
delighted to see you here today along with your colleagues. May
I invite you to break with the tradition of past secretaries of
state and actually give a commitment today that you will come
and be questioned at length by the Northern Ireland Grand Committee
when the rates proposals are actually before the Northern Ireland
Grand Committee in about two weeks' time?
Mr Hain: I am afraid that I cannot
give you that commitment because I do not know what the diary
is and the precedent has been that the ministers do that. I have
some very able ministers who will be more than able to field even
the most adversarial questions; not that the honourable Member
ever puts adversarial questions. She puts very firm and forceful
ones, as she is entitled to do.
Q7 Dr McDonnell: Did you give any
consideration to adjusting corporation tax in terms of industrial
development and could you in the future perhaps do something like
that?
Mr Hain: No, I did not because
that is not within my remit. The tax level is set on a UK basis.
Chairman: We are going to move on now
to the subject of your memo, for which again many thanks. I appreciate
your doing it this way rather than making a lengthy opening statement.
We have all read it and colleagues on both sides of the Committee
want to ask questions, starting with Lady Hermon.
Q8 Lady Hermon: May I direct your
attention to the role and functions of the Independent Monitoring
Commission? May I ask what you see as the main purpose of the
IMC?
Mr Hain: I believe that its main
purpose should be to verify whether, in the case of the IRA, the
promises made on 28 July, which were historic, to close down its
paramilitary and criminal activity, are actually being implemented
on the ground. We had an important report last week and I think
we shall have an even more significant one in January when it
has had a chance to assess not just the first four weeks following
28 July, but the first five or six months.
Q9 Lady Hermon: May I kindly and
gently remind the Secretary of State that when the legislation
was introduced in September of 2003 the purpose of the Commission
was to build confidence on all sides because confidence and trust
are essential for politics to work in Northern Ireland? That being
the case, could the Secretary of State just explain to the Committee
what justification there has been for cherry-picking through the
recommendations of the IMC, in particular when the IMC recommended
after the Northern Bank robbery that the Sinn Fein allowance should
be suspended for at least 12 months. They recommended a financial
penalty against the PUP. Could the Secretary of State just explain
the justification for cherry-picking recommendations of the IMC?
Mr Hain: As the honourable Member
knows, when the IMC reported on the Northern Bank robbery and
the McCartney murder, those terrible events, and recommended that
we suspend Sinn Fein's allowance, we did and in fact I moved the
motion in my previous role as Leader of the House. What has happened
since is not a question of cherry-picking. As Secretary of State
I have to consider the recommendations they make and they did
not make a recommendation in this case; they were silent on the
question of whether Sinn Fein's allowances should be maintained
in suspension or reinstituted; they were silent on that matter.
I shall come to the PUP in a moment, the Progressive Unionist
Party. I think that any fair-minded person would say, notwithstanding
the importance of verifying whether the activity has been closed
down, that the two events in the summer, 28 July, everybody agrees
that the unconditionality of that statement made by the IRA was
a clear commitment to ending paramilitary and criminal activity
and the armed campaign, plus the decommissioning which General
de Chastelaine announced on 26 September, were events of an historic
substance which had never occurred before. Of course Westminster
allowances will be a matter for the House not a matter for me,
though I will obviously put my case it will be a matter for the
House, and I felt it was right to announce last week my recommendation
that the allowances be reinstated.
Q10 Chairman: As it is a matter for
the House, will it be determined therefore on a free vote as far
as the Government are concerned.
Mr Hain: Indeed; as it was last
time.
Q11 Sammy Wilson: You talked about
the silence of the IMC in its latest report about certain aspects
of what the IRA are up to. May I refer you to a number of paragraphs?
Paragraph 3.14 says that there are indications that the organisation's
intelligence function remains active though its folks may be becoming
more political—whatever that means. The IRA did organise
protests during the summer which led to some disorder and, as
in the past, made preparations for weapons to be available. On
the decommissioning of weapons, the IMC report indicates that
major progress has been made in the direction spelled out some
months before. However, it is too early to draw firm conclusions.
That is paragraphs 6.3 and 6.4. The IMC report was not silent,
in fact if anything the IMC report pointed very firmly to the
conclusion that allowances should not be restored and yet you
restored those; just as you ignored the views of the Chief Constable,
who gave you a strong case for putting Sean Kelly in jail and
keeping him there, yet you released him against the evidence of
the police.
Mr Hain: These are separate issues,
but let us take them one by one. I put Sean Kelly in prison on
the recommendation of the Chief Constable and then, with the IRA
statement due the following day and having seen that statement
and knowing that Sean Kelly was signed up to it, I decided that
it was right to release him. It was a difficult decision. I was
criticised for arresting him, as a prisoner out on licence who
was clearly in breach of his licence, on the recommendation of
the police and the evidence supplied to me. I was strongly attacked
for that. I was then attacked for releasing him again when I thought
the conditions had changed radically following that IRA statement.
I do understand the resentment and the criticism within the Unionist
community which you are quite properly echoing. On the question
of the allowances, the IMC report did not make any recommendations
on the allowances. It did also report that it is too early to
make more than a rather limited assessment of its effect, though
the initial signs are encouraging. He did not quote that part
of the statement in paragraph 7.2. The report also said that it
was a very significant provisional IRA statement of 28 July and
decommissioning reported on 26 September. It also made it clear
that, in terms of incidents, while there are plenty of reports
of disturbing incidents by Loyalist paramilitary groups and indeed
dissident Republicans, virtually nothing is reported in the case
of the IRA. That is not to say that we can therefore take this
report as an invitation to say everything is rosy in the garden;
I am not saying that. I am saying that historic progress has been
made.
Q12 Chairman: You have said on a
number of occasions that the really significant report is the
one you expect in January. Could it not therefore be said that
you have acted perhaps a little prematurely and precipitately
in making this announcement last week in advance of that January
statement?
Mr Hain: It could be said and
no doubt will and in fact I think that is just what Peter said
and I look forward to seeing what your Committee reports on this.
I think it was right for me to make a political judgment to say
so far so good. The allowance is reinstated in the case of the
Assembly from 1 November and in the case of Westminster that is
a matter for the House to decide. It was right to do that to show
progress has been made which by anybody's standards is historic
even though we need to have a proper independent verification
which will be reported by the IMC in January.
Q13 Rosie Cooper: You have largely
answered part of the question I was about to ask about the reinstatement
of the allowances and the fact that you are going to ask Parliament
to consider Sinn Fein's MPs' allowances. I note from the memorandum
which you supplied that following recent violent scenes in Northern
Ireland you decided not to impose a financial penalty on the PUP
at this time. Could you say more on the thinking about how that
has happened and whether you have had any discussions with other
political parties on the issue and with whom?
Mr Hain: One of the joys of this
post is that everybody attacks whatever you do from both sides
and I do not quarrel with that; it is a great job.
Q14 Chairman: Good preparation for
the highest office.
Mr Hain: I am very happy doing
what I am frankly. In terms of the Progressive Unionist Party—and
I am glad my honourable Friend has asked the question—this
is again a very difficult decision to take. The suspension of
the PUP's allowances had lapsed in the spring—actually during
the General Election campaign. When I came in I had a decision
to make on the back of an IMC report due into Loyalist violence
as to whether I re-imposed the ban. Worrying signs were starting
to build up of the feud between the Ulster Volunteer Force and
the Loyalist Volunteer Force. Obviously the Progressive Unionist
Party has been linked to the UVF. Then over the summer we had
this grisly feud of murders. It was quite clear to me that the
Progressive Party Leader, David Irvine, was doing all he could,
often without much effect because of lack of influence, to try
to stop these murders. It was also clear to me, once the IMC report
had been published into that Loyalist feud, that around the Whiterock
riots, where Loyalist paramilitaries tried to murder members of
the Police Service of Northern Ireland in a quite venomous and
orchestrated way, David Irvine was doing his best to try to stop
that happening. I thought that I could just follow the recommendation
of the IMC and close him down, but I actually thought it was quite
important to keep somebody politically linked to Loyalist groups
to try to keep the pressure on them to follow the IRA and to end
their vicious feud, end their paramilitary activity and decommission.
I still think that is the right decision. I am sorry for the long
answer, but may I also say finally on this that others were working
in the field trying to influence the groups including official
representatives, not of my office, and their advice was for us
to hold off and let them see whether they could actually achieve
a closedown of this feuding and violence.
Q15 Lady Hermon: How has the IMC
responded to the fact that you have chosen to follow some of the
recommendations? Have they felt their work has been undermined
by your decisions?
Mr Hain: I have not had any formal
response from the IMC. I shall keep in touch with IMC members
and in due course would hope to meet them to discuss their own
assessment in private and how they see things going.
Q16 Chairman: Have you not done that
yet?
Mr Hain: The report was only published
last week.
Q17 Chairman: I appreciate that.
Mr Hain: I only received it a
few days before and there is usually a period of assessment of
all its recommendations. It has made many others which we still
have to consider and obviously I shall want to see them as soon
as I can. I do see them quite regularly and indeed I met Lord
Alderdice, a member of the IMC, only a few weeks ago.
Q18 Chairman: How regular are your
meetings with them?
Mr Hain: As regular as they need
to be. Whenever they need to see me, my door is open and we are
in regular touch with the secretariat. I meet them periodically
as well. May I add one other point on this? I receive regular
information about what is going on and intelligence reports and
others, much the same kind of reports that the IMC receive when
they are making their assessments.
Q19 Mr Campbell: In your memorandum
to the Committee, paragraph 5, you say that you are intending
to do all you can to facilitate progress towards restoration of
the institutions, but you then go on to say you "will further
implement those aspects of the Belfast Agreement where work is
incomplete or ongoing". I would imagine you would have been
in the job long enough to know that the bulk of the Unionist community
is totally opposed to the Belfast Agreement. That hardly sounds
like the words of a facilitator to me.
Mr Hain: I am not sure to which
aspect the honourable Member is referring. Of course I understand
that, particularly in the case of the Democratic Unionist Party
which opposes the Belfast Agreement, and I respect it. In fact
the majority of Unionists voted for it in the referendum and the
Ulster Unionist Party backed it, whatever disillusion has happened
subsequently with the failure by the IRA until recently to deliver
on what it promised and other factors. I think that the fundamental
architecture of that agreement, albeit that it needs updating
and some account taken of the changes since and the views, including
from the DUP, which were expressed in the latter part of last
year, the fundamentals of North/South cooperation, East/West cooperation,
of the commitment to power sharing and devolved government and
an end to violence and paramilitary activity, would have all those
fundamentals in it.
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