Villiers warns NI of welfare system limit

The British government has issued the most strongly worded warning yet to Northern Ireland’s politicians that it will not pay for a more generous welfare system to operate in Northern Ireland than in Britain.

In a letter yesterday to party leaders, Northern Ireland Secretary of State Theresa Villiers said last week's offer to let Stormont use £1 billion of borrowing to fund redundancies rather than infrastructure would be put "back on the table" if the parties reach a deal. However, she said London would be prepared to listen to demands for more treasury money if the Stormont negotiations agree welfare cuts and significant reductions in next year's budget for the Executive.

The letter emerged as Taoiseach Enda Kenny claimed in the Dáil that Sinn Féin's Gerry Adams is "refusing to face up to his responsibilities" and that he has blocked Martin McGuinness from agreeing a deal – a claim Mr McGuinness later said was "laughable".

Minister for Foreign Affairs Charlie Flanagan will travel to Stormont for the latest talks, though already Ms Villiers's ambition that they should end by 5pm on Thursday looks unlikely to be met.

Much of the first day is scheduled for interparty discussions according to a timetable she put forward, followed by talks about parades, welfare and finance matters involving the parties, Ms Villiers and British officials.

There will be another round-table about dealing with the past, attended by Ms Villiers, Mr Flanagan and Irish officials, before "a final review" on Thursday, according to the letter seen by The Irish Times.

On welfare, the NI parties need to agree a package “within what’s affordable within their budget”, she said: “The Executive can fund its own top-up, but the UK government will not provide extra money to finance a more expensive welfare system than provided in the rest of the UK.”

Efficiency savings

However, London would consider “clear, costed, evidence-based proposals which reflect NI’s unique circumstances, genuinely advance reform of the public sector and do not carry repercussions for other parts of the UK. But this has to take place against a background of NI making its own efforts to secure efficiency savings, to raise its own revenue and to use existing resources effectively,” she said.

A deal must be reached by the end of the week if legislation devolving corporation tax to Stormont can be passed by Westminster before May.

"After that, the prospects for completing the legislation before the election become much more uncertain," she said, adding Mr Flanagan and she remained committed to heads of agreement Dublin and London advanced last week. "These continue to represent our best shared assessment – respecting the three-strand approach – of where agreement might lie," she wrote, though Sinn Féin believes the Irish Government is heeding London's agenda.

Past and parades

On the past, there is a need to ensure investigators “can be sufficiently independent, commission rigorous work and have access to material on patterns from other bodies to ensure independence and credibility”. On parades, she said “there is more scope for common ground among the parties than is currently recorded”.