Belfast Telegraph

Monday 22 September 2014

Local business voices fears at Darling’s economic optimism

Northern Ireland business leaders have expressed disappointment over the Budget and voiced fears that the Chancellor’s upbeat economic predictions are unduly optimistic.

The main business organisations also raised concerns that cuts in public spending might have a disproportionate impact on the province’s economy.

Nigel Smyth, CBI Northern Ireland director, said there was little in the way of major good news for the province in the Budget.

“There are, however, a number of welcome micro-measures which should help to stimulate investment and support struggling businesses.

“Increased investment allowances, a ‘top-up’ trade credit insurance scheme, a time-limited scrappage scheme for cars, a range of low-carbon initiatives and some support for housing will be welcomed.”

Ann McGregor, chief executive of the Northern Ireland Chamber of Commerce, said the increase in fuel duty would add to the already high transport costs of manufacturers.

She added: “The biggest challenge may well come from the impact on the local economy from the planned measures to reduce public spending.”

Joanne Stuart, chairman of the Institute of Directors said: “The Chancellor’s growth assumptions are overly optimistic and will mean even more borrowing on top of the huge amounts he has already committed to.

“The growth in public spending will have to slow significantly over the next few years, and Northern Ireland, with its higher dependence on the public purse, will bear a disproportionate burden as a result.

Ms Stuart said that the focus on getting people back into work and providing them with the skills they needed was welcome.

Wilfred Mitchell, policy chair of the Federation of Small Businesses in Northern Ireland, warned that the Budget measures would hit cross-border shopping.

He said: “The phased increase in fuel duty, along with price rises for tobacco and alcohol when combined with the introduction of a new higher VAT rate in 2010 will be detrimental to local firms currently benefiting from record levels of cross border trade.”

Mr Mitchell said that the Chancellor had largely ignored the needs of small businesses.

Kevin Kingston, chairman of the Ulster Society of Chartered Accountants, said the efficiency savings meant that belts would be tightened for several years.

Eamonn Donaghy, chairman of the Institute of Chartered Accountants in Ireland Northern Ireland tax committee, said the increased taxes and duties would affect all taxpayers.

But he said there were progressive aspects to the Budget, such as the new tax allowance of 40% for machinery, and the provision for firms which were suffering losses to recover some of the tax paid when they were in profit.

Bryan Gray, chief executive of Northern Ireland Manufacturing, said he hoped that the Chancellor’s predictions of recovery were correct.

He added: “We welcome the measures which he has announced in relation to the construction industry, and we would be particularly keen to see the investment for emerging technologies, and green manufacturing coming on-stream as soon as possible.”

The Northern Ireland Independent Retail Trade Association chief executive Glyn Roberts expressed disappointment with the Budget.

He said: “We would have liked to have seen targets designed specifically to stimulate consumer spending and to encourage businesses to take on more staff.

“Although the targets set to improve the situation for under 25s through training are to be welcomed, it will have in reality little impact on unemployment.”

Jimmy Kelly, Irish regional secretary of Unite, said they were “unimpressed” by Mr Darling’s Budget.

He said: “The 50% tax rate on incomes over £150,000 is political tokenism that will affect few.”

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