Theresa May's deal with the 'toxic' DUP will cost us far more than £1.5 billion

Theresa May's £1.5 billion deal with the DUP is just a downpayment.
May will need to sign extra agreements to stay in power.
Deal has led to calls for extra spending in Scotland, Wales and Northern Ireland.
Pact will put serious strain on the Northern Ireland Peace process.

LONDON — Theresa May says her hung parliament deal with the DUP will cost the UK £1.5 billion. In reality it will cost us all far more.

By signing this deal May has set in train a whole series of financial and political costs, the full extent of which it is not yet possible to comprehend.

May has agreed an extra £1 billion of spending in Northern Ireland plus further controls over an extra £500 million in already committed funds to the province. Yet any extra spending in Northern Ireland will lead to immediate calls for increased spending in Scotland, Wales and England, under the spirit of the so-called Barnett Formula.

This formula is non-binding and May could simply choose to ignore it. However, doing so would be politically costly and be a campaigning focus for nationalist parties across the UK. She is therefore likely to be forced into making further commitments to other parts of the Union. How much more will this end up costing the exchequer? At the moment it's anyone's guess.

The other big part of today's deal is the commitment to scrap the government's manifesto pledge to cut winter fuel payments and the pensions triple lock. The cost of these policy commitments to the exchequer will easily exceed the £1.5 billion in infrastructure and health spending to Northern Ireland. However, the extra spending is unlikely to end there.

In many respects, today's deal is just a downpayment. The agreement states that the deal is restricted to confidence motions and supply bills in the House of Commons only. But without a majority of her own, May will need to acquire the support of the DUP on many other matters as well. As the deal states explicitly: "support on other matters will be agreed on a case by case basis". Perhaps DUP support on other matters will be secured without any further financial commitments by the UK government but it somehow seems unlikely.

And even if no further financial commitments are made to Northern Ireland in the medium term, today's deal will need to be renewed in just two years when May, or whoever is prime minister by then, presents another Queen's Speech to the Commons. Whichever way you look at it, May's purse strings are likely to look very loose by the time she leaves Downing Street.

However, these financial costs are as nothing to the potential political costs of this deal. Over recent weeks a series of senior Conservative politicians have warned May against doing a deal with the DUP because of the threat it poses to the Northern Ireland peace process.

Under the Good Friday Agreement, the UK government is required to remain entirely impartial in the peace process. plans for a formal legal challenge

The most worrying part of today's deal is May's agreement to extend the Military Covenant to armed forces in Northern Ireland. This is hugely controversial in the province and will further strain the peace process as well as the talks to restore the Northern Ireland Assembly.

Former prime minister John Major, who was involved in securing Good Friday, warned earlier this month that any deal with the DUP would risk the return of "hard men" and violence to Northern Ireland. If this does prove the case, then the political and financial costs of dealing with it will dwarf any commitments May has made today.

The deal also comes at big political cost to May herself. The images of the prime minister standing outside Downing Street with the DUP will hang around May's neck as long as she remains in power. As the former Hong Kong governor Chris Patten said at the weekend, the DUP is a "toxic brand" that now risks contaminating the Conservative Party as well.

While May has insisted that her party remains opposed to the DUP's fringe views on issues like abortion, same sex marriage, and creationism, the deal she signed today will leave her party deeply associated with them. The attempt to modernise the Conservative Party away from its former image as, in May's own words, "the nasty party" now looks at serious risk.

Just as dangerous for May is the image this sends out about her government. After campaigning for office on a ticket of "strength and stability" May is now presiding over a minority government propped up by an inherently unstable deal with the DUP.

And while signing this deal will allow her to pass the Queen's Speech later this week, it will still only leave her with a tiny majority, which could be overturned by only a handful of rebellious by Tory MPs.

Pretty soon the inherent long-term political and financial risks of securing such a fragile majority will easily exceed any short-term political protection this deal will afford her.