Cameron ponders whether to provide £2 billion to Stormont

A response is expected from British prime minister David Cameron to a £2 billion financial package request from the Northern Executive's five parties which should determine whether a pre-Christmas deal can be achieved.

Well-placed sources said Mr Cameron would be receptive to the “£2 billion ask” from the five main parties but said it remained uncertain whether he would respond in “full measure”.

Mr Cameron and his Downing Street and treasury financial advisers were deciding at the weekend what level of response they could offer to the request for £2 billion in grants and loan-raising powers which the parties say could unlock a deal on the other key issues such as the past, parades and flags.

In a conference call on Saturday Mr Cameron provided First Minister Peter Robinson and Deputy First Minister Martin McGuinness with an idea of what he may be prepared to deliver, with a more definitive response due today.

After the conference call Mr McGuinness made clear he believed Mr Cameron must substantially if not fully deliver on the request.

Commitment

“These proposals require additional financial support and a commitment from the British government to deal with outstanding issues from the Good Friday and other agreements,” he insisted.

The package involves a request for £200 million to deal with the past; £800 million to cover public sector restructuring, including paying for thousands of redundancies and £800 million to help create a “shared future” in areas such as education and housing.

The parties also want £214 million of penalties for so far failing to implement welfare change to be written off. It is understood that £1.6 billion of the £2 billion would come from the Northern Executive being granted additional loan-raising powers that would be interest-free.

Welfare reform

Any agreement on this package also implies Sinn Féin signing up to welfare reform, which hitherto it has obstinately opposed.

However, also as part of the overall agreement the five main parties now believe they can find £70-£90 million from existing resources to provide support for those who would be hardest hit by cuts in welfare payments.

Reflecting the Sinn Féin concern over welfare change, Mr McGuinness said: “Any agreement reached has to protect the most vulnerable in society, invest in building peace and reconciliation and welfare safeguards, deliver on outstanding agreements, grow the economy and enhance the working of the institutions.”

The parties resume negotiating at Stormont this morning, with Minister for Foreign Affairs Charlie Flanagan and Northern Secretary Theresa Villiers expected to join the talks at around 11am.

The parties already have made considerable progress in areas such as the past, parades and flags and cutting back on the number of Northern Executive departments and reducing the size of the Assembly.

Some gaps remain however, with SDLP negotiator Alex Attwood warning that there were still difficult issues to be overcome.