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Will Andy Burnham’s big ideas affect Northern Ireland?

Andy Burnham’s early announcements on electricity bills, bus fares and business rates will have limited direct impact in Northern Ireland, where most of those powers are devolved to Stormont.

·4 min read
Andy Burnham standing outside No 10 Downing Street. He is wearing glasses, a white shirt, blue tie and navy suit.

Andy Burnham became the new UK prime minister on Monday. This week he tried to show voters he had the power to make their lives better in small ways, with a series of early morning announcements on electricity bills, bus fares and pubs.

Those measures also show that for people in Northern Ireland, decisions taken at Stormont rather than Downing Street will often have the greatest impact.

How will the electricity bill cut affect Northern Ireland?

Burnham announced that VAT would be removed from household electricity bills for an initial six months. This will save the typical customer around £45 a year.

However, the measure will not apply in Northern Ireland for reasons linked to the post-Brexit deal known as the Windsor Framework.

This agreement means some EU VAT rules still apply in Northern Ireland, and the government decided it would take too long to negotiate the electricity VAT cut with the EU.

The BBC understands that some Stormont officials believe the VAT cut is completely permissible under the terms of the Windsor Framework and that there is no reason the EU would oppose it.

But as things stand it will not be applied. Instead, Stormont will receive additional money from Westminster and will have to come up with its own scheme.

Burnham may favour further intervention in energy markets as part of his intention to exert greater control over the

"everyday economy"
.

Any intervention is unlikely to apply to Northern Ireland because it has its own separately regulated electricity, gas and water markets.

Will the bus fare cap change anything in Northern Ireland?

Burnham announced that he was reinstating the £2 cap on single bus fares in England, after it was increased to £3 under the Starmer government.

Public transport is a devolved matter and is operated through Translink, the government-owned company.

There has never been a fare cap along the line of the English model. Instead, there are a variety of discount schemes.

As a result of the announcement for England, Stormont will get some extra money, perhaps up to £15m.

Stormont ministers are not obliged to spend this money on public transport, but they will face pressure to do so.

Translink is currently consulting on significant service cuts due to budget pressure.

Intervention in the bus market was Burnham's signature policy when he was mayor of Greater Manchester.

Again, that

"everyday economy"
policy has limited relevance to Northern Ireland because public transport is already under state control.

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The top floor of a pink double decker bus sits empty. The illuminated sign at the front of the bus says 'not in service'.

What about business rates for pubs and venues?

Burnham announced a 20% discount to business rates for pubs, social clubs and live music venues in England.

Rates are a property tax and the discount should reduce the typical payment by around £1,000 next year.

A man with square glasses and short dark hair laughs and turns away from a bar holding a pint of beer. He is wearing a white shirt and dark jacket. There is a woman behind the bar laughing and a bald man is also pictured behind the man holding the beer laughing. Another man is holding a television camera in the background.
Image caption, Burnham announced a 20% discount to business rates for pubs and other venues

This is another policy area devolved to Stormont, so Burnham's measure does not apply.

The cut in England will generate a small amount of additional money for Northern Ireland, but not enough to do anything of significance with rates.

Northern Ireland's regular property revaluation, which is used to set business rates, was thrown into disarray earlier this year.

The hospitality industry forced the Finance Minister to effectively abandon the process as they did not want to pay more.

So how could Burnham matter?

For Stormont ministers, the most important issue is their budget.

They have been unable to produce a budget for this financial year, saying what they have been given by Westminster is inadequate and would inevitably mean damaging cuts.

They will try to persuade Burnham that Northern Ireland is underfunded and needs additional money beyond what the devolution funding formula delivers.

Burnham is well aware of the intricacies of devolution funding, but much of his focus has been on how the English regions are shortchanged by the current arrangements.

His Chancellor John Healey spoke to Stormont's Finance Minister John O'Dowd this week.

There was no sign of an imminent breakthrough, with O'Dowd saying

"a different approach is required"
.

Burnham 'has his work cut out' on Northern Ireland

What will an Andy Burnham premiership mean for NI?

VAT cut on household electricity bills will not apply in NI

NI to get additional money due to Burnham's bus fare freeze

Key takeaways as Andy Burnham becomes PM

This article was sourced from bbc

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