NI benefits take hit in autumn statement

George Osborne delivers his Autumn Statement to MPs in the House of Commons.

Cost cutting measures revealed in the chancellor's autumn statement look set to affect thousands of people on benefits in Northern Ireland.

Wednesday, 05 December 2012
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George Osborne said some benefits will go up at a rate of 1%, which is lower than the rate of inflation and the rate expected next year.

He also revealed that the Executive will get an extra £132m for capital spending.

Giving his reaction, Finance Minister Sammy Wilson said: "I welcome the decision taken by the chancellor to channel more funding into capital investment.

"The additional capital investment allocations were funded by cuts to Whitehall departments' resource budgets of 1% next year and 2% in 2014-15. However, because health and education were exempt from these cuts and some additional allocations were made in respect of business support measures, the impact on Northern Ireland was much less severe."

The Office for Budget Responsibility projections for the UK economy and public finances suggest that further public expenditure reductions will be necessary beyond 2014-15. There can be no doubt that the Executive will face some very difficult decisions

Sammy Wilson

A planned rise in fuel duty has been scrapped, giving a £40 yearly saving to the 1.1m motorists in Northern Ireland.

Measures to help small businesses were also outlined, and Londonderry will receive funding to improve its ultra-fast broadband access.

Sammy Wilson also welcomed news that the Treasury will support a derogation from the Carbon Price Floor for NI.

He continued: "Over recent weeks I have robustly made the case to the Chief Secretary that enforcement of the Carbon Price Floor upon Northern Ireland would have a massive detrimental impact on the local energy sector - for example local generators would have lost out to southern generators and electricity bills could have risen between 10 and 15%."

The chancellor said personal allowance will be increased to £9,440, a change which could help 615,000 people in NI and lift 8,000 out of income tax altogether.

Meanwhile corporation tax across the UK will be reduced to 21%.

Secretary of State Theresa Villiers said discussions are continuing over the possibility of allowing Stormont leaders to match the Republic's low rate.

She said: "The Government's relentless focus is on rebalancing the economy and creating the conditions in which the private sector can grow.

"So the Chancellor announced that corporation tax will come down to 21% by 2014 from the 28% we inherited. Our corporate tax rates will be the lowest of any major western economy providing a significant boost for investment and growth. And we are continuing discussions on the case for devolving corporation tax to the Northern Ireland Executive."

Glyn Roberts from NIIRTA called it a missed opportunity.

He continued: "NIIRTA welcomes the overall reduction in UK corporation tax but given that our economy is lagging behind the rest of the UK in terms of recovery, today's statement was a missed opportunity to announce the devolution of corporation tax to Northern Ireland."

It is good news that Northern Ireland will get £132m more capital spending which should be ring-fenced to support infrastructure projects in our town and city centres

Glyn Roberts

Giving his reaction, Ian Coulter from CBI said he didn't expect a resolution on corporation tax but welcomed the news on carbon price floor.

He said: "CBI Northern Ireland is delighted that the chancellor has listened to our concerns on the potential impact of the carbon price floor on electricity generators in Northern Ireland.

"Without this there would have been a significant adverse impact on the costs of electricity generation in Northern Ireland and, undoubtedly, a negative impact on the prices that consumers would have paid."

The Ulster Farmers' Union has welcomed the decision to scrap the planned three pence per litre fuel duty increase.

Harry Sinclair said: "The spiralling cost of fuel has had a disproportionate effect on farmers and families living in rural areas. Rural families typically have longer journeys to make to access services, to shop or go to work and fuel is also a major cost of production on farms.

"We have lobbied against further increases in the price of fuel and on this occasion the rural voice has been listened to".

Shadow Secretary of State Vernon Coaker said the government is not doing enough to help young people who are out of work.

He continued: "This morning in the House of Commons, I asked the Secretary of State what the Chancellor was doing to help get young people in NI off the dole queue and back to work.

"The Minister said I should 'wait and see' what was in the autumn statement. I've waited and seen, and the answer is 'nothing'. The Minister needs to realise that it's not good enough to tell the one in five young people out of work to 'wait and see' whether or not there will be any jobs. The Westminster government needs to get a grip, and take action now to tackle youth unemployment in Northern Ireland."