Belfast Telegraph

Sunday 28 December 2014

An unspectacular Budget ... but one that works for us

As the dust starts to settle on Budget day, there's time to reflect on how Chancellor George Osborne's hour in the spotlight will really affect us in Northern Ireland.

There's been a lot of talk about how it was a Budget that included a lot of changes but not a lot of action, summed up best by the Institute of Economic Affairs: "This is a fiddly, tinkering, complicated Budget which cannot be expected to do much to promote the economic growth the UK so badly needs."

While that may very well be the case, we in Northern Ireland can feel fairly pleased to have come away benefiting most from the moves to boost the economy and consumption.

The fact that we have a higher percentage of our population due to be lifted out of paying income tax altogether because of the planned increase in the tax free allowance to £10,000 is good news but not something we should be overly proud of.

And because we have a higher percentage of small companies, we'll be able to take more advantage of the £2,000 national insurance allowance.

Meanwhile, much focus has been put on the cut in corporation tax and what it means for our chances of getting a thumbs up from Downing Street when the First and Deputy First Minister visit next week and from the views to the left of this column, it would seem that our case has been strengthened.

But of more help to business across the UK should be the new rules which the chancellor has given the Bank of England.

Like the US Federal Reserve, it has been told to give forward guidance on interest rates, a move which doesn't sound like much but does wonders when it comes to calming nerves among commercial banks.

More than any others, that policy should ease the flow of money to businesses because if banks know the rate at which they borrow from the Bank of England is going stay at an all time low for a number of months, they can be more confident when it comes to lending.

All in all, a budget which might not be the answer to our current struggles but which certainly provides a few chinks of light.

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