The pay of Northern Ireland assembly members will be slashed by more than £13,000, in a bid to restore power sharing after almost 600 days.
Stormont members are not “performing the full range of their legislative functions”, Karen Bradley, the Northern Ireland secretary said.
The move follows the repeated failure to heal the bitter divide between the Democratic Unionist Party (DUP) and Sinn Fein, to restore their coalition.
Last week, Northern Ireland passed Belgium for the world’s longest peacetime period without a functioning government, when it reached 590 days.
Sinn Fein has blamed the DUP’s “disgraceful denial” of language and gay marriage rights, accusing the party of reneging on a February agreement to re-establish the Stormont executive.
But Arlene Foster, the DUP leader - who was first minister when power-sharing collapsed, in January last year - said “There is only one problem party and let’s call it out - that’s Sinn Fein.”
In a statement to MPs, Ms Bradley said pay would be by 27.5 per cent cut in two stages, cutting it from £49,500 to £35,888, as recommended earlier this year.
“While Assembly members continue to perform valuable constituency functions, it is clear that during any such interim period they will not be performing the full range of their legislative functions.
"So, in parallel, I will take the steps necessary to reduce Assembly members' salaries in line with the recommendations made by Trevor Reaney.”
The Northern Ireland secretary ruled out immediate elections for the devolved assembly and announced plans to give civil servants more powers to implement policies.
And she said she would remove the legal requirement to set a new election date and allow an executive to be formed at any time in this period.
“As significant decisions are taken at this critical time, Northern Ireland’s voice must be heard,” Ms Bradley said.
“With new powers coming back from Brussels and flowing to Stormont, Northern Ireland needs an executive in place to use those powers to meet the challenges and opportunities ahead.”
She added: “Critical cross-cutting programmes – addressing social deprivation, tackling paramilitarism – are stalling.”
The pay cut would not affect staff members “as I do not think that MLAs’ staff should suffer because of the politicians’ failure to form an executive”.
Both the DUP and Sinn Fein welcomed the decision to dock pay which Michelle O'Neill, the Sinn Fein deputy leader, said “should have been introduced months ago”.
Ms O'Neill also alleged that the Northern Ireland secretary was suspending her powers to call an election because she faced the prospect of a court ordering her to do so.
“That is a retrograde step. Any attempt to move away from the Good Friday Agreement or towards direct rule will fail,” she added.
“Clearly, the British Government's reliance on the DUP remains a central problem and, if any process around restoring the institutions is to be credible, Karen Bradley must begin prioritising the rights of citizens over Tory Party self-interest.”
The Independent has launched its #FinalSay campaign to demand that voters are given a voice on the final Brexit deal.
Sign our petition here
