Northern Ireland could be hit hardest by the Budget
George Osborne’s public sector pay plans could cost our economy £210m
Northern Ireland’s civil servants could face an annual pay loss of up to £1,000 if the UK government scraps national wage rates for public servants.
The plan, thought to be included in this week’s budget, will bring public sector rates of pay into line with private sector wages.
But if implemented, it could prove a staggering blow by taking up to £210m out of the local economy.
This would hit our already perilous financial state as Northern Ireland relies more heavily on public sector jobs than other regions in the UK.
It would mean the families of the hundreds of thousands of public sector workers here would have less money to live on.
It could also create a trickle-down effect for the rest of the local economy.
Opposition is already gathering across Northern Ireland.
Finance Minister Sammy Wilson said the move would have a devastating impact on families.
Brian Campfield, NIPSA’s general secretary, told the Belfast Telegraph: “It’s an attack on all families in Northern Ireland.
“It’s going to have a major impact on the standards of living of our members, who are already struggling with a two-year pay freeze, increased pension contributions and job losses.”
More than 200,000 people are employed in the public sector across Northern Ireland — which has the UK’s highest rate of civil servant pay proportionally.
Public sector workers here are paid as much as 40% more than their counterparts in the private sector.
UK Treasury officials have said the move — which could be rolled out from next year — would ensure the UK has “a responsive, modern labour force”.
Mr Wilson described the plan as another way of balancing Treasury books by “grabbing” money from devolved administrations and poorer regions in the UK.
He said: “This is a measure with wide ramifications for individuals and for our economy as a whole, and will certainly be vigorously opposed not just by ourselves but by the other two administrations (Wales and Scotland).”
Mr Campfield said the timing could not be worse. “What this will do is suck money out of the economy and lead to increased unemployment because there is no spending being done,” he said.
“The public sector includes doctors, nurses, social workers, architects and engineers. They will all be affected.”
Ulster Unionist MLA Michael Copeland meanwhile suggested that the Tory-Lib Dem coalition may be working on a false premise.
“This could all be predicated on the notion that Northern Ireland is a cheaper place to live than certain other areas of the United Kingdom,” Mr Copeland said.
“That notion is wrong.”
Elsewhere, UK Chancellor George Osborne has indicated that he will target stamp duty avoidance with aggressive new measures.
Stamp duty starts at 1% of a property’s value for homes costing more than £125,000. It goes up to 5% for properties costing more than a million — which are thought to number in the hundreds in Northern Ireland.
Reported plans to cut the 50p tax rate on earnings over £150,000 may have a similarly marginal impact in Northern Ireland — where earnings are historically lower than in the other parts of the UK.
However, the mooted introduction of a carbon tax would carry implications for Northern Ireland’s three power stations, leading economist John Simpson said on Sunday night.
Mr Simpson speculated that hundreds of jobs could be at risk at Kilroot — the province’s largest power station near Carrickfergus.
He said: “It burns an awful lot of fuel — which puts a lot of carbon in the atmosphere.
“If this tax is introduced, it’s possible the (station’s) US investors could decide to mothball the station or move out.”