Budget 'recognises NI challenges'

Published Wednesday, 20 March 2013
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Chancellor of the Exchequer George Osborne has delivered his Budget to the House of Commons, amid the economic climate that has led Northern Ireland's unemployment rate to hit a 15-year high.

FACTBOX: BUDGET IN BRIEF
Rise in personal allowance from 2014
no income tax on the first £10,000 of earnings.
September's planned fuel duty rise
scrapped.
Planned 3p rise in beer duty tax
scrapped and replaced by a 1p cut in duty on a pint.
Public sector pay cap of 1%
extended by one year in 2015/16.
Corporation tax
reduced by a further 1% to 20% in April 2015.
New Employment Allowance
takes first £2,000 off employers’ National Insurance bills.
Tax free child care vouchers worth £1,200 per child
for families on universal credit.
Flat rate pension worth £144 a week
to be brought forward to 2016.
New Help-to-Buy scheme
for those struggling to find mortgage deposits.

Shortly after 12.30pm on Wednesday, Mr Osborne rose to deliver what he called "a Budget for people who aspire to work hard and get on".

But in Northern Ireland, nearly 65,000 people are claiming unemployment-related benefits. Only one other UK region has a higher rate.

And the unemployment rate now stands at 8.5% - a figure last recorded in 1998.

However, Northern Ireland Secretary of State Theresa Villiers welcomed the latest Budget and said it recognised the challenges that had to be faced - including an over-reliance on the public sector.

This Budget recognises the challenges facing Northern Ireland and the urgent need to renew and rebalance the economy away from an over-reliance on the public sector.

Secretary of State Theresa Villiers

Speaking from Washington DC, Ms Villiers said: "We need to boost private sector growth and jobs, and today's announcements will provide a stimulus for that.

"We also need resolute measures to address community divisions - a stable and prosperous Northern Ireland requires action to build a genuinely shared and cohesive future for everyone, as well as a successful economy."

The Secretary of State welcomed an extra £94m of capital spending power for the Northern Ireland Executive. She also highlighted that there would be an income tax reduction for 618,000 people.

Another 7,000 people in Northern Ireland will be lifted out of income tax altogether, while 80,000 families will receive support towards childcare costs.

Savings will be made in National Insurance for 25,000 Northern Ireland businesses, while 10,000 will be taken out of National Insurance Contributions.

According to Mr Osborne, it is taking the UK "longer than anyone hoped" to find a way out of the economic slump.

We must hold to the right track.

Chancellor George Osborne

Citing Cyprus as further evidence the global crisis is not over, the chancellor outlined the forecast of the Office for Budget Responsibility - which predicts the UK will avoid a triple dip recession.

Mr Osborne also stated that the Government had cut the UK's deficit by a third and helped businesses to create 1.25m new jobs.

The average unemployment rate across the UK stands at 7.8% - lower than the 8.5% figure for Northern Ireland. But the EU (10.7%) and Republic of Ireland (14.7%) rates are significantly higher.

Of those unemployed in Northern Ireland, 58.6% have been out of work for a year or more.

Unemployment among those aged 18-24 has also reached its highest levels since records began - now standing at 23.8%.

Stormont Enterprise Minister Arlene Foster said: "These latest statistics provide further evidence that the NI economy continues to be impacted by the global downturn.

"There have been extensive negotiations between the Executive and the Treasury over the devolution of corporation tax powers, which culminated in a report to the Prime Minister towards the end of 2012.

"I believe that lower corporation tax would lead to new jobs through attracting new inward investment and encouraging locally owned companies to expand."

She added: "The NI Economic Strategy recognises that improving the competitiveness of the NI private sector, through a focus on export-led economic growth, is key to increasing employment and prosperity for all."

We are now at a critical stage and the time has come for decisions to be taken.

Enterprise Minister Arlene Foster

Nigel Smyth, director of the Confederation of British Industry (CBI) for Northern Ireland, described the latest figures as extremely disappointing.

"But what is perhaps more concerning is that Northern Ireland is now nudging ahead of the UK average rate and reaching its highest level of unemployment in 15 years," he said.

He called on the Executive to re-double its efforts to combat the rise and look again at short to medium term options for jobs growth.

"We would strongly agree with the comments of Minister Foster this morning on the subject of Corporation Tax.

"It is vital that the Prime Minister uses the opportunity of next Tuesday's meeting with our First and deputy First Ministers to 'just say yes' to the devolution of powers to provide long-term certainty for potential investors and local businesses."

Unions echoed Mr Smyth's concerns, adding that the budget will be restricting to growth in Northern Ireland.

NIPSA's Brian Campfield said: "The confirmation within the budget that Northern Ireland departments will face a further extra 1% cut to their budgets shows that the failed austerity measures will continue."

ICTU called for further investment to encourage development in the region.

"We believe that a real plan is needed to invest in real jobs and real growth," said Peter Bunting, ICTU Assistant General Secretary.

"The alternative is the slow spiral of decline and stagnation being inflicted upon the people of Northern Ireland by a far-away Chancellor with a far-out dogma - the ruinous cult of austerity."

The SDLP's Pat Ramsey expressed concern that the latest unemployment figures show efforts made by the economic ministries in the Northern Ireland Executive are not working.

He has now called for Ministers to "get real" on job creation.

For too long, they have offered piecemeal platitudes and PR stunts.

Pat Ramsey, SDLP

"All our economic departments must realise that, until we can tackle unemployment head on by creating sustainable jobs and attracting long term investment, we are condemning those we serve to a bleak future," the Foyle MLA said.

Ulster Unionist leader Mike Nesbitt welcomed the backing for further investment in infrastructure, but added that must be followed through in Northern Ireland as well.

"The government plans to invest £15bn of savings over the next ten years on infrastructure. That investment in infrastructure must be carried through here in Northern Ireland.

"Due to today's budget, there is to be an extra £94m of capital spending available over the next two years. We too must spend on roads and public transport," he added.

Mr Osborne announced that a planned rise in fuel duty will be scrapped, a move which Alliance MP Naomi Long welcomed.

"It is well known that motorists in Northern Ireland pay substantially more for fuel than the average in the rest of the UK, so local drivers will be helped by it.

"In addition to the short-term benefits, it also helps secure the future of small businesses and will have a positive impact on the general public, due to our transport system being mainly roads-based," she added.

In the rowdy House of Commons, Mr Osborne continued to deliver his Budget as the deputy speaker was repeatedly forced to intervene.

Declaring the UK "open for business", the chancellor announced a series of measures designed to boost commerce, including a 1% cut in corporation tax to 20% in April 2015.

He also announced that, from 2014, no one would have to pay income tax in the first £10,000 of their earnings and confirmed more measures aimed at curbing tax dodging.

Stating his Budget was one for a country that wants to be "prosperous, solvent and free", the Chancellor retook his seat just before 1.30pm.

Phil Flanagan, Sinn Féin's Fermanagh-South Tyrone MLA, said that implementing further austerity measures is no way to deal with the growing unemployment crisis.

The deputy chairperson of the Assembly's Committee for Enterprise, Trade & Investment added: "While there is no quick fix to the continuing issue of unemployment, opportunities for economic growth and substantial job-creation are out there and are waiting for support from government.

"It is not good enough for Arlene Foster to hide behind the fact that unemployment rates are lower here than in the rest of Ireland or the rest of Europe; that will not wash with the people who elected us and will not mean much to people who are unable to secure employment.

"As has been demonstrated time and time again, the economic policies of the British government are not providing the impetus required to kick-start our local economy.

"Their economic policies are designed to facilitate economic growth in Britain and we are simply an afterthought to those policies," he continued.

The Northern Ireland Independent Retail Trade Association (NIIRTA) has welcomed the "pro-small business emphasis" of the Budget and hailed it as positive for growth in the local retail sector.

Glyn Roberts, the body's chief executive, said: "On balance, this is a positive Budget for local small businesses, independent retailers, and for Northern Ireland's economy as a whole.

"NIIRTA has long argued for small traders to be supported in employing more staff, and so we welcome the £2,000 Employment Allowance as a step in the right direction of tackling Northern Ireland growing unemployment problem."

He added that cuts to income tax would boost disposable income and increase high street spending and called for investment in road networks and town centre improvements.

"Overall, this Budget is better than expected - we hope that it will provide a real boost for sustainable growth in our local economy, given today's depressing unemployment figures."

© UTV News
Comments Comments
18 Comments
Paul in Derry wrote (392 days ago):
@Shen - right on the mark. Hit the working people because they're too busy working to comlain and kick up a stink. That's the easy option the government go for. Statistics proove that working middle class people in the UK are the least likely to vote. So what do the government do - pander to the electorate of course. Until working people start voting and making it clear we will not vote for politicians who punish us for working and spend a great deal of money supporting the parasites who don't want to, nothing will change.
Ireland in Ireland wrote (392 days ago):
I never had a view on a United Ireland, peace was always far more important to me, but, the same issue remains, it makes no sense to have two economic entities in Ireland. The duplication, bureaucracy and headaches for business as well as the obvious issue of budgets not having the best interests of Northern Ireland. A lot of economic policy should be harmonised across Ireland for everyones benefit.
Ben in Dublin wrote (392 days ago):
@Shen in Belfast, Dublin does want you, all your people in N.I, we can have a strong future as one island working together. The economy is growing again. We will bounce back as always.
Jim in Belfast wrote (392 days ago):
Does anyone know if the help-to-buy scheme will be available in NI?
Steve in Antrim wrote (392 days ago):
Look on the bright side. At least NI doesn't have the highest rate of unemployment in the UK.
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