Analysis: PM gets little out of Stormont proposal, other than a quieter life

There are risks for Prime Minister David Cameron if he accepts the proposal
There are risks for Prime Minister David Cameron if he accepts the proposal

Judging the progress of any private talks process is always difficult, as journalists are outside the process and therefore largely dependent on the spin given by those at the table.

Throughout these negotiations, the parties have been gloomy about the prospects of a deal on all the issues under discussion, but there have been seemingly inexplicable moments where suddenly all the parties have talked up the prospects for a deal.

It is too soon to know whether what was on Friday purported as a breakthrough is in fact that, or an attempt to deflect on to the Government the blame for the collapse of the talks in coming days.

But the scale – and nature – of the money demanded by Stormont parties suggests that it might be the latter. Asking for the return of all the money deducted from Stormont’s budget for refusing to implement welfare reform money on top of massive financial demands in other areas would appear optimistic, unless the Government has given private hints that it is prepared to be generous.

From the Government’s point of view, it is difficult to see what – other than a quieter life – David Cameron would get from this deal. Although Friday’s mini-agreement seems to involve Sinn Fein (and, less importantly, the SDLP) accepting cuts in the welfare budget, they only seem to be doing so by securing, under a different heading, the money removed from the budget for welfare reform.

A package of £2.16 billion over 10 years equates to just over £200 million extra money each year. Yet welfare reform was only meant to save about £114 million. So overall, this proposal would actually cost taxpayers more than will be saved by cuts to benefits.

And, crucially, the fact that most of this money would have been extracted from the Government after a refusal to implement an unpopular Government policy will be noticed elsewhere.

With the Scottish nationalists in control in Holyrood, David Cameron will be keen not to give them the impression that refusing to implement his reforms for two years is rewarded with massive new public spending.

But if the Prime Minister agrees to this proposal the risks aren’t all with him.

The Executive’s existing borrowings of £1.7 billion are such that the repayments cost more than the cost of running the Assembly. At some point, an additional £1 billion of debt will have to be paid back. And at that point there will be even less money for public services.