NI welfare reform: Foster says new bill could lead to Assembly collapse

Arlene Foster says that the new welfare reform bill could lead to the collapse of devolution

Finance Minister Arlene Foster has echoed an MP's warning that welfare reform could lead to the collapse of devolution.

Sammy Wilson warned that the new bill "probably spells the end of the Northern Ireland Assembly".

He said Sinn Féin would probably block any devolved cuts, putting the Stormont budget under greater pressure.

A Sinn Féin delegation is meeting the prime minister at Westminster to discuss the issue.

Earlier Ms Foster said: "Welfare reform has to be dealt with or the assembly and executive ceases to exist."

However, she said if the Westminster government stepped in to impose legislation it could solve the problem.

There is currently a £600m shortfall in Northern Ireland's budget largely because of the failure to introduce last year's Stormont House Agreement.

The agreement between the executive and the British and Irish governments has been held up due to deadlock over the implementation of welfare reforms in Northern Ireland.

The Treasury is currently taking around £10m a month from the executive's funding to reflect the fact it is still operating the old, more expensive welfare system.

Ms Foster said the roll-out of the government's latest benefits reforms will have an even greater impact on the administration in Belfast, if the executive fails to reach an agreement on welfare.

She added that the £600m gap was now set to significantly increase as a result of these latest reforms.

"We haven't been told the full scale yet, but it will be in extra hundreds of millions of pounds. So this is even more pressure to have this dealt with and dealt with quickly," she said.

But Sinn Féin's John O'Dowd said it would be a huge failure if the government took back welfare powers.

"If the British government step in and take welfare under their control, it only solves half the problem.

"Welfare is only part of the equation. The entire financial setup of the executive has to be reviewed.

"And it has to be understood by the British government that there are different circumstances here than there are in Britain and they have to recognise that.

Earlier, speaking in the House of Commons, Chancellor George Osborne said that the financial situation at Stormont "can't be sustainable".

Mr Osborne said he was well aware of the "difficult situation" regarding the finances of the Stormont Executive and the objections to what he described as "sensible welfare reforms that will help people in Northern Ireland into work".

He added: "We are working with the first minister and deputy first minister to resolve this impasse but it clearly can't be sustainable that we allow a devolved administration to ignore the controls placed on it."