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National insurance rise 'disappointing'

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British Chancellor of the Exchequer Alistair Darling leaves the Treasury for Parliament
Finance Minister Sammy Wilson has said it was "disappointing" to see the increase in national insurance contributions from 2011-12.

Mr Wilson branded the Chancellor's pre-budget report a "politician's budget", which brought little change for Northern Ireland.

It had been feared that up to £100m could be lost from the region's bloc grant.

Instead Chancellor Alistair Darling announced an £8m spending boost for the Stormont Executive.

"The huge cut in the bloc grant that we were anticipating for 2010-2011 has not materialised with an additional £7.7m available to the Executive for 2010-11 as a consequence of the allocations made to Whitehall departments," Sammy Wilson told UTV.

Mr Wilson said it was largely inevitable that only a small number of significant announcements would be made at this time given the state of public finances and the proximity to the general election.

"This is a politician's budget with an election in mind because many of the hard decisions are being put off until after the election.

"But there's a huge backlog of debt to be dealt with sometime."

Mr Wilson said there will be understandable concern at the implications for local public services of the £12bn in efficiencies expected of Whitehall departments up to 2013-14.

"Although the constraints in public sector pay will also apply to Northern Ireland, a key issue for the Executive is whether we would wish to match the Whitehall efficiency targets and I will be taking forward some preparatory work with my ministerial colleagues early next year."

In his last pre-budget report before the General Election, Chancellor Alistair Darling admitted that the recession was far deeper than he had predicted and announced a public sector pay squeeze to help pay off spiralling national debt.

The Chancellor said public sector workers face a 1% pay cap from 2011, a move which provoked union fury.

Bankers also face a crackdown with a new one-off tax on big bonuses.

Mr Darling laid out plans to slash spending from 2011 - after the General Election - as he admitted the economy would shrink by 4.75% in 2009 compared to his April Budget estimate of 3.5%.

He also said the public finances were deeper in the red with a deficit of £178bn this year compared to the £175bn he had predicted.

But he insisted in his Pre-Budget Report that the economy would start growing by the end of the year and next year would grow by between 1% and 1.5%.


Main points of the Pre-Budget Report, regarding tax:

  • One-off 50% levy on any banking bonus above £25,000 before April 5 2010, raising £550 million to get unemployed into work.
  • Planned 0.5% increase in National Insurance contributions doubled to 1%, meaning from 2011/12 employees will pay 12% and employers 13.8%. Starting point for NI to be raised so those earning £20,000 will pay no more than at present.
  • Plan to increase inheritance tax threshold to £350,000 scrapped for next year. Threshold will be frozen at £325,000 in 2010.
  • Thousands more workers to be brought into 40% income tax band by a one-year freeze on the threshold of around £43,000.
  • Temporary 2.5% cut in VAT to end on January 1, with the sales tax returning to 17.5%.
  • Planned 1% increase in small companies' Corporation Tax deferred for one year, leaving the tax at 21% until 2011/12, when it will increase to 22%.
  • Bingo duty cut from 22% to 20% in the spring.
  • 50p-a-month duty on landlines to pay for 90% superfast broadband coverage by 2017.

Main points of the Pre-Budget Report, regarding spending:

  • No Spending Review to be held.
  • Basic state pension to rise by 2.5% in April. Other inflation-linked benefits to rise by 1.5%
  • State spending growth to be held to an average 0.8% annually from 2011 to 2015, meaning cuts to some budgets and the scrapping of some programmes.
  • Public sector pay bill to be cut by £100m over three years. All new appointments worth £150,000 and bonuses over £50,000 to require Treasury approval.
  • Public sector pay rises - outside the armed forces - to be capped at 1% for two years from 2011.
  • Spending on frontline NHS and schools to be protected for two years from 2011.
  • Savings of £5bn on IT projects, legal aid and prisons.
  • Cap on state contributions to public sector pensions, saving £1 billion a year from 2012.
  • Extra £2.5bn for Afghanistan military mission next year.

© UTV News

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At 17:26 on 09 December 2009, NORMAN wrote:
THE BUDGET WILL HAVE AN IMPACT HERE WITH VAT RISE WILL MEAN HIGHER ENERGY BILLS GOODS IN SHOPS DEARER SO PEOPLE WILL SPEND LESS ALSO THE RISE IN NAT INSURANCE WILL MAKE EMPLOYERS THINK ABOUT EMPLOYING YOUNG ONES
At 14:27 on 09 December 2009, jim wrote:
here here...2nd that.. when doesn't n.ire suffer. that doesn't include Belfast because as a city it get everything thrown it's way and the rest of the n.ire get the bone.. minister's in storment sitting on the pigs back awaiting another pay rise, happy to spend taxpayers cash on flowers and tea for the chosen few, happy to see Belfast flourish, new cathedral quarter, new arts centre, new roads, whilst the likes of Poots and Wilson turn down applications for jobs and buildings in other parts of the province....well chaps, have a merry Christmas...go live on a working mans wage for a week and see how you fare out....
At 12:23 on 09 December 2009, Gerard wrote:
When times were good this 'Labour' government failed to take advantage and tax those who had got flithy rich under Thatcher and continued to do so under Blair. Now the ordinary working people have to pay for their failure. The cuts could be offset by stopping taxpayers money going to fund political parties in NI and forcing a pay cut on the already overpaid MLAs. And reducing the no. of same.
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