The Deal is Done

Weber Shandwick’s London and Belfast teams look at the consequences of the Conservative-DUP deal.

The DUP pushed the Conservatives hard in negotiations, and have come away with their agreement : they will support the Government on all confidence votes and all votes on budgets, Brexit and national security. They also have their price: £1.5 billion. Leader of the Democratic Unionist Party Arlene Foster announced on the steps of Downing Street that the “Conservatives have recognised the case for extra funding in Northern Ireland” in recognition of its unique history. As a result, Northern Ireland will receive an extra £1 billion over the next two years, and “flexibility” on £500 million in spending already announced.

The new money will be split with an allocation of £400m to infrastructure, £200m health service transformation, £100m for immediate pressures in health/education, £150m to broadband, £100m to deprived communities and £50m to mental health.

Arlene Foster is returning to Belfast today to continue negotiations with Sinn Féin to agree a power-sharing deal (which may or may not include smaller parties).

With the Conservative-DUP deal dependent on the restoration of the Northern Ireland Assembly, Sinn Féin has the option to accept or reject the cash injection. Sinn Féin has told the BBC it will pore over the fine details of the deal before making a decision. For its part, the UK government has made clear that it is still fully committed to the Good Friday Agreement, and that the DUP will have no part in Westminster’s negotiating team on restoring power-sharing.

Looking beyond Northern Ireland, the DUP also extracted a commitment that there would be no change to the pensions triple lock and that the winter fuel allowance would remain universal. The agreement further commits the Government to spending the NATO standard of 2% of GDP on defence, and honouring the Armed Services Covenant in all parts of the United Kingdom.

Foster said that the two parties had formed a coordination committee to oversee the agreement, which they intend to keep in place for the length of the Parliament. They will revisit the agreement after each session to check progress against its principles and aims.

The agreement should help stabilise the Conservatives in one sense, especially by restoring the popular triple lock and winter fuel allowance. Ten more reliable votes in the House of Commons will be welcome, especially as many critical votes on Brexit will come up over the next two years.

The financial settlement will not, however, pass without comment. First Minister of Wales Carwyn Jones has already condemned the deal as “outrageous” and a “straight bung” to win DUP support. We can expect a robust response from Scottish First Minister Nicola Sturgeon shortly, as the UK Government has said there will be no extra money in the deal for Scotland. The Labour Party will also demand extra funding across England for health and education, to match that given to Northern Ireland, and there will be some grumbling among Conservative MPs about school budgets and A&E times in their own constituencies.

In Britain, there is not enough awareness of or interest in the special condition of Northern Ireland to accept extra funding only for Belfast to spend. The circumstances of this deal mean that the Conservative Party will struggle to mount a principled argument against extra funding. It is hard to make the case that infrastructure, health and broadband investment are related specifically to the peace process in Northern Ireland and not wider needs of all of the United Kingdom. Ministers will face escalating pressure immediately to ease austerity across the whole country, and their political survival may well rest on how they respond.