To ask the Minister of Finance for an update on his recent meeting with the Chancellor of the Exchequer.

Mr O'Dowd (The Minister of Finance)

With your permission, Mr Speaker, I intend to answer questions 1, 8 and 13 together. The meeting with the Chancellor was useful and allowed me to update her directly on the issues facing the people whom we all represent. I emphasised the need for the upcoming Budget to support growth and continued investment in and transformation of our public services. I also stressed that any tax and spend decisions taken in the autumn Budget must fully consider the impact that they have on our people and local businesses. I raised the need for a full fiscal framework, including the need for additional fiscal devolution and borrowing powers. The Chancellor outlined the broader fiscal context ahead of the autumn Budget and highlighted the need for investment, growth and a review of the tax system. The meeting also provided a valuable opportunity to showcase the Executive’s achievements to date. Those include the agreement of three Budgets; exceeding the £113 million income generation target set out in the restoration package; the establishment of a transformation fund and the allocation of £129 million to six innovative projects; and the publication of our Programme for Government. Having visited Studio Ulster, the Chancellor acknowledged the strength of our creative sector, which is supported through city and growth deals. She highlighted the potential of digital technology and AI, the need to invest in skills, particularly through our universities, to attract future investment and the importance of leveraging trade opportunities and how the upcoming regional trade summit in October will provide an opportunity to showcase the North's businesses and inward investment opportunities to an international audience.

Dr Aiken

I thank the Minister for his reply. One of the issues that we are having to deal with is that the Budget has been put back to the end of November. We have already seen the problems that our friends in Scotland and Wales have had in putting forward a three-year Budget. What contingencies have we put in place to look at that, particularly given that our pot will be squeezed and that Health and other areas will be under considerable pressure?

Mr O'Dowd

I recently had the opportunity to meet the Welsh and Scottish Finance Ministers. At that stage, I believe that we were not aware of the date of the Budget, although we knew that it would be delayed. They have slightly different legal processes to go through. The situation is not ideal for our budgetary processes, but it is best to wait for the Chancellor's statement on 26 November before we table our final Budget to the Executive. Hopefully, we will get agreement so that it can go out for public consultation. My main concern is that we want to ensure that we have maximum time for public consultation. Ideally, I want to see a 12-week consultation, and I think that that is still possible.

Mr Buckley

As a north Armagh politician, I know that the Minister will be acutely aware of the huge contribution that farmers make to the Northern Ireland economy. He will also be aware of the unprecedented attacks that farming has faced both from some in this Chamber and from the Chancellor in her announcements on the family farm tax, which will disproportionately cripple Northern Ireland farmers. Did the Minister raise that issue of concern with the Chancellor? Is he confident that she at least alluded to some mitigating factors that will help farmers to deal with that substantial threat?

Mr O'Dowd

The Member will be aware that the deputy First Minister and I met the Chancellor on the date in question. The issue of farm inheritance tax was raised with the Chancellor. I was not encouraged by the Chancellor's response, and I made it clear to her on a number of occasions throughout the meeting that decisions made in London that may have beneficial impacts, in their minds, on various areas in England or Wales have significantly different impacts on this place. Farm inheritance tax is definitely one of them. The impact that it has had here can and will be significantly detrimental to our farming community. However, the Chancellor, in my view, is not minded for turning on the issue. We have seen a number of U-turns from the Government, and I hope that this will be the next one or is certainly on the list, but, after listening to the Chancellor's response, I am not encouraged in any way to suggest that she will move from her current position.

Mr O'Dowd

Not directly with the Chancellor on that occasion. However, the Member will be aware that, as part of the 2025-26 Budget, the Executive allocated £50 million towards early years and childcare strategy that supports hard-working families by delivering more affordable childcare. The number of children eligible for support has increased by 60% compared with last year, providing that much-needed subsidy, so the Executive have made significant strides in that regard. There was an additional £5 million awarded to childcare as part of one of the monitoring rounds as well. I know the importance of the issue, and I have no doubt that the Executive will continue to focus on it.

Mr O'Toole

Minister, you and I agree that we have a fundamentally broken fiscal and, indeed, constitutional model and that we need to take more power back here and on to this island more generally. Given that we know that the Budget, when it finally comes, will reflect an even greater fiscal squeeze in the UK because of its underperforming economy and a range of other decisions that we do not agree with, is not now the time to take powers and initiative into our own hands and for you to publish your proposals for greater fiscal devolution on a journey to much greater independence for us here and, indeed, change in this island?

Mr O'Dowd

Engagement with the Treasury is already under way in relation to greater fiscal powers for this place. Obviously, it will have to be a final decision for the Executive on which, if any, of those powers are transferred. However, those discussions are already in train. They started and continued from our discussions with the Treasury in relation to the comprehensive spending review and the Holtham report. We then immediately entered discussions around how we finalise the full fiscal framework for this place, including the devolution of tax-varying powers.

Miss Dolan

Minister, what will be in a full fiscal framework?

Mr O'Dowd

It will cover a number of areas including further consideration of Professor Holtham's review of our level of need, Housing Executive borrowing powers and additional fiscal devolution. In my opinion, it is vital that it provides the Executive with the financial tools that we need to deliver more sustainable public finances and public services. Taxation is obviously a serious and important matter. It will focus the minds of this place and the Executive in relation to our responsibilities and roles here. Taxation is not simply about how you raise more taxes. You can change the level of tax that you raise in certain areas — you might want to increase it — but also in terms of public attitudes and approaches to various health matters, for instance. It is an important lever that we require, and I look forward to continuing the discussions with the Treasury.