Belfast Telegraph

Tuesday 23 September 2014

Business View: Sharp end of austerity still to come

Margaret Canning, Belfast Telegraph business journalist
Margaret Canning, Belfast Telegraph business journalist

Northern Ireland bears plenty of shameful claims to fame on the economic front, including the highest rate of economic inactivity of all 12 UK regions at 26.8%, compared to a UK average rate of 22.1%.

That is bad enough – and is currently the subject of a consultation, like many of our difficult economic issues.

But yesterday's net fiscal balance report from the Department of Finance and Personnel is a reminder of an even deeper-rooted problem, the extent of our fiscal deficit.

When you adjust for the size of the economy, at £9.6bn Northern Ireland has the biggest deficit of the UK.

It's no exaggeration to say that we are the poor cousins of the UK family – itself no poster child for fiscal good sense, with one of the highest fiscal deficits of the western world.

But unlike other European countries nursing a heavy shortfall, we have no one breathing down our necks to force us to make good on the shortfall.

Spain and Cyprus suffered tangible deprivations to pay for their economic follies. But for us, there are no strings attached. Unlike even our neighbours in the Republic, we have had no difficult cuts forced upon us.

Visit the Republic, and as a wise friend has indicated to me, even the taxi drivers will be well-informed on the state of the country's finances and the measures which have to be taken to fix them up.

Most of us here, taxi drivers or not, haven't had to think about such things.

But as Finance Minister Simon Hamilton indicated last week, the worst of public spending cuts is yet to come.

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