Northern Ireland parties request £2bn from David Cameron

NI Secretary Theresa Villiers reticent on whether Downing Street likely to accept plan

The North's five main parties have asked British prime minister David Cameron for a £2 billion (€2.55 billion) financial package over 10 years to persuade them to reciprocate on issues such as parades, flags and the past.

Downing Street and British treasury advisers are considering the financial paper presented to the Northern Secretary Theresa Villiers by the Northern parties yesterday. The £2 billion is double what Mr Cameron put on the table in his and Taoiseach Enda Kenny's abruptly ended visit to the Stormont talks last Friday week.

The parties – the DUP, Sinn Féin, the SDLP, the Ulster Unionists and Alliance – caused some surprise by agreeing this financial formula for alleviating welfare changes and budget cuts of £1.5 billion over the next five years.

The mood at Stormont last night was hopeful a deal could be struck early next week when Minister for Foreign Affairs Charlie Flanagan and Ms Villiers are expected to be back at Stormont.

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Mr Flanagan said a “very important breakthrough” was achieved yesterday which was “highly significant”.

“On Monday I believe we can reach agreement – if not on Monday then a short time thereafter,” he said.

When asked did he think Mr Cameron would deliver on the required financial package Mr Flanagan said: “I do see the basis here and a very significant prospect that agreement will be reached.”

Ms Villiers said the talks now were at a “crunch time”. She added there were no plans for the “prime minister to come back for Christmas” although no one was ruling out the possibility that Mr Cameron and Mr Kenny would want to be present were a deal to be signed.

Sources warned however that a deal was not over the line. The parties were continuing to talk last night to see if matters such as parades, flags, the past and restructuring Stormont could be resolved.

Financial proposals

For the moment, however, the focus is on whether Mr Cameron will agree to the financial proposals. These involve a request for £200 million to deal with the past; £800 million to cover a restructuring of the public sector including the cost of paying for thousands of redundancies; £800 million to support shared education and housing and improve community relations.

It is understood that of this figure £1.6 billion would come from the Northern Executive being granted additional loan-raising powers. The Executive wants such loans to be interest free.

In addition the parties want £214 million of penalties for failing to implement welfare change to be written off.

It seems welfare reform would press ahead notwithstanding Sinn Féin’s opposition to such change but that the Executive would find an additional £70 million-£90 million to cushion the effects of benefit cuts.

Ms Villiers was cautious on whether Mr Cameron would endorse such a package: “We will look at the paper very seriously. But our response is going to have to take account of the realities of the deficit we inherited from the [last Labour] British government and the limited resources we have.”

Ms Villiers said that any treasury movement on finance would require comprehensive reciprocation from the parties on matters such as parades, the past and flags.

Gerry Moriarty

Gerry Moriarty

Gerry Moriarty is the former Northern editor of The Irish Times