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Budget 2015: Northern Ireland reaction

By Claire Cromie

Published 08/07/2015

Chancellor George Osborne
Chancellor George Osborne

There was only one specific mention of Northern Ireland in George Osborne's Budget today - a fleeting reference to Tory efforts to move the Stormont House Agreement forward.

But dramatic policy changes from tax credits and the 'living wage' to corporation tax will have a huge impact on both citizens and businesses here.

Here's how business leaders and politicians have reacted:

DUP

Speaking during the budget debate in the House of Commons on Wednesday Sammy Wilson MP for East Antrim said:

"Whilst I welcome the government’s aspiration to spread growth across all regions of the UK, increase productivity, make work pay and create jobs for those currently on welfare I do have concerns about the ability of this budget to deliver on those goals.

"First of all apart from the implementation of the Stormont House agreement some of which is designed to enhance our ability to grow the economy there were no other new measures proposed for N.I. Non of the infrastructure proposals were specific to us and in fact capital invest by govt is due to be reduced.

"The reduction in Corporation tax should make the implementation of our policy cheaper or enable us to bring the rate down well below that of the Republic but that of course is dependent on Sinn Fein and the SDLP acting on their previous agreement to introduce Welfare reform. The more worrying aspect is that there are now another £300 to £400m worth of welfare changes to deal with. On present experience these will also be avoided so widening the hole in the budget and make it more likely that the government will have to step in.

"Given the number of people in N.I. who unfortunately are still in low paid jobs I am very worried about the impact of changes in working tax credits. The government has argued that the reduction in these benefits will be replaced by higher wages paid by employers as he National living wage is introduced. Given that the benefit changes will not go hand in hand with implementation of the living wage many on low wages will find themselves worse off. This is unfair and economically unwise and we will oppose this along with the first step to have different benefit payments for different parts of the country a first step in regionalisation of benefits.

"It is significant that whilst the DUP go to Westminster to arguing for Northern Ireland and its economically vulnerable Sinn Fein pseudo concern for the poor is trumped by republican ideology of abstention. Republican rhetoric about defending the poor is no more than a “tinkling cymbal”.

"There are things to be welcomed in this budget things which the DUP promoted such as increased defence payments, more resources for soldiers who have been injured in line of duty, keeping fuel duty unchanged, improving apprenticeship opportunities, no taxation of disability benefits, more spending on health. We will give our support to these issues, demand greater openness on the effect of welfare changes and oppose measures which hurt the economically vulnerable."

Federation of Small Businesses NI

On Corporation Tax:

“In making his announcement on the UK wide reduction of the Corporation Tax rate, Chancellor George Osborne referenced that the last cut in corporation tax had brought about major advantages in terms of growth and employment.

“Effectively cutting the rate to Corporation Tax to 18% by 2018, makes it all the more critical for the Northern Ireland Executive to set the date and rate using the devolved powers to vary the corporation tax rate.  However there is a need for this reduction to be coupled with investment in infrastructure and the development of skills in order to ensure a competitive positioning."

On Fuel Duty:

“FSB Northern Ireland is delighted that the UK Government has once again frozen fuel duty.  Over the past five years, FSB nationally has campaigned on this issue.  Businesses in Northern Ireland are reliant upon transport, meaning the fuel makes up a large proportion of business running costs.  This is particularly significant as Northern Ireland has amongst the highest fuel costs in the United Kingdom.”

On National Living Wage:

“Budget 2015 is a mixed bag for small businesses.  On one hand, the FSB welcomes the announcement that the UK Government will increase the annual Employment allowance from £2000 to £3000.  On the other hand, there are a number of our members who will find the new Mandatory Living Wage challenging.  Whilst FSB Northern Ireland research has revealed that two thirds of our members already pay the living wage or above, there is a real concern over the extent to which additional red tape and regulation will cut into a business’s growth and time.”  

Wilfred Mitchell, Northern Ireland Policy Chair

Sinn Fein

"Today's Tory budget is a direct attack on low paid workers, families, those struggling to survive, frontline public services and our political institutions. This budget will usher in billion of further cuts targeted against the most vulnerable in society. We have seen a £12 billion reduction in welfare payments with a further £20 billion cuts to public services flagged up.

"These latest cuts announced today are coming on top of the Tories' slashing of £1.5 billion from the block grant and would take millions more out of the local economy.

George Osborne and his millionaire cabinet colleagues appear intent on driving thousands of families here deeper into poverty and attack those on low and middle incomes.  This is clearly a budget for the rich from a party which has no mandate here.

"The fact is that austerity isn't working.  It doesn't work in Britain, it doesn't work in Ireland and it doesn't work in Europe. There is a fairer way. We need to grow the economy and stop introducing cuts targeted at those who have nothing left to give and which have a negative impact on the local economy.

"Instead of further austerity we need workable and sustainable finances for the Executive and powers to grow and develop our economy."

Conor Murphy MLA

Ulster Unionist Party

On Corporation Tax:

“This announcement is doubly good news. It will be good for the economy of the UK and it will also make the cost of lowering the rate of Corporation Tax in Northern Ireland to 12.5% much more affordable.

“The Ulster Unionist Party identified Corporation Tax as the single most important policy lever to rebalancing the Northern Ireland economy by creating the environment where tens of thousands of new jobs could be generated. We support moving to 12.5% as soon as possible to make Northern Ireland competitive with the Republic of Ireland in seeking Foreign Direct Investment.

“Unfortunately, the inability of the DUP and Sinn Féin to agree on the implementation of the Stormont House Agreement means it is no longer practical to lower our CT rate on 1st April 2017 and those seeking quality new jobs will have to suffer at least another year on benefits as a result.

“The Chancellor’s announcement that CT will be cut to 18% in 2020 means there will be less of a hit on the Block Grant if we adopt a 12.5% rate. The prize is 35,000 to 40,000 new jobs, which would be transformational for those individuals, their families and our society.”

Adrian Cochrane-Watson MLA

SDLP

On Vehicle Excise Duty:

“Among the announcements in the Tory budget today was a new roads fund to build new infrastructure. In financing it, the Treasury have indicated they plan to change Vehicle Excise Duty rules to include new cars on an emissions based system.

“The Treasury must work closely with the devolved nations to implement these changes. But more importantly, we must see our fair share of roads investment as a result. New infrastructure developments in England must see Barnett Consequentials won for the north and that money must be spent rebuilding the economy in our North West. That means a new Belfast – Derry motorway and a commitment to the A5 and A6 projects.

“The economy of the North West will thrive or dive based on infrastructure development. We need to ensure that all possible resources are made available to attract new investment and create new jobs.”

Mark H Durkan MLA

On Tax Credits:

“The reduction in Child Tax Credits for families of three or more children is going to impact not only on the health but also the ability to learn of those children in families on low incomes.  Parents, in an effort to balance budgets, will not be able to buy fresh fruit and vegetables and may, regrettably, turn to fast food in an effort to appease hunger.  That would have a direct  impact on issues like obesity and lead to further poor health.

“Poor diet has a direct impact on children’s ability to learn and it will mean schools will have an increasing role in providing healthy breakfasts for children from many homes. However can they cope with that burden when they are also hit with austerity measures directed against the poorest in society.

“This assembly must immediately monitor these cuts and take whatever measures are possible to reduce the dreadful impact on society in general and the marginalised in particular."

John Dallat MLA

On student grants:

“The Tories have now confirmed that when it comes to cuts, students are the first in line. They began the last parliament by trebling tuition fees, condemning our young people to a lifetime burden of debt, and now they’re cutting off support to those young people least able to afford a university education.

“This is an attack on working class students and families. It’s an assault on social mobility and it’s typical of the Tory attitude to low income families. They claim to want to help people secure jobs and move away from a life on benefits but they’re cutting access to higher education and continue to push people into poverty. What we need is a fully implemented strategy for widening participation, not stifling it with funding cuts."

Pat Ramsey MLA

Alliance

“Some elements of this Budget will be beneficial for Northern Ireland. For example, the continued drop in the UK rate of corporation tax will make any localised alternative more affordable. However, the steep and severe cuts to welfare spending will hit Northern Ireland particularly hard, given the profile of our population. There are better ways of incentivising people into work than hitting payments, and it is through local and affordable modifications to the UK welfare system that we can better protect local people, in addition to taking a more benevolent and strategic approach to training and employment measures

“This Budget also reinforces the importance of devolution in other ways. Northern Ireland is not bound by the proposal to transform remaining maintenance grants for loans for students in higher education, and local decisions can be taken in Northern Ireland that better reflect the local commitment to encourage young people, in particular those from a less well-off background, into further study.

“Without functioning devolution none of this would be possible. Instead, we would end up being governed just like every other part of the UK, with the interests of London and the South East often dominating.

“Northern Ireland is facing financial meltdown in the absence of implementation of the local version of welfare reform and the wider delivery of Stormont House. For no good reason, some parties wanted to wait until after this Budget statement. The Northern Ireland political process cannot be allowed to drift over the summer; instead the parties need to return to the negotiating table.”

Stephen Farry MLA

UKIP

“Osborne’s attack on the working poor means there will be more non-working rich and more work-shy professional dodgers. UKIP demand a better approach in our dealings with the Chancellor over his Budget, not a Sinn Fein engineered dog-fight.

“Northern Ireland faces an economic meltdown if our five party Stormont Executive freaks itself into a confrontational frenzy, setting it apart from the rest of the UK, over George Osborne’s Budget. If Martin McGuinness forces division lurching, into a Stormont crash, he and his party must be isolated.

"UKIP would call his resignation bluff. If he won’t climb down from his high horse over Welfare, then London must be told to take charge of our welfare and benefit responsibilities. Something like ‘take that and put it in your pipe Martin’ has to be the way to deal with this economic usurper.”

 “How can (Osborne) stack up caring the less well off in his own country and, at the same time, authorise the spending of billions propping up overseas aid and subsidising the EU. UKIP is speaking up for our own people who will recoil from the Chancellor’s willingness to hit British people while looking after everyone else’s poor. UKIPs message to the Chancellor is to start looking after our own people, not the EU and overseas aid beneficiaries.”

David McNarry MLA

Unite NI

“As was expected, this budget was a harsh blow to workers. The downward revision of growth forecasts and slippage on the date by which budgetary surplus will be achieved expose the failure of the Government's austerity policies. Instead of policies reducing economic demand historically low interest rates offer Government a golden opportunity to borrow to invest in critical infrastructural projects which would stimulate growth and facilitate a transition to a low-carbon, modern economy.

“While he could find the money to lower taxes for corporations, Mr Osborne considered it necessary to scrap maintenance grants for students coming from the poorest households. If adopted by the Northern Ireland Executive, this move would effectively shut out many working class children from university education despite their meeting the entry grade requirements.

“Moves to lower the tax credit earnings threshold and increase the discount factor substantially will result in a dramatic loss of income for millions of working families across the UK. Tax credits have lifted tens of thousands of children out of poverty. Inevitably, this will result in a step-change in the incidence of childhood poverty.

“Cuts to tax credits will be implemented automatically in Northern Ireland through the UK-wide HMRC system. It will be a devastating blow to those households who rely on tax credits to make ends meet.

“Proposals for the adoption of a 'Living Wage' of £9 per hour by 2020 fall far short of making up for these cuts. Trade unions must now redouble their efforts in building industrial campaigns to compensate working people for the loss of income. Now, more than ever, workers need to join a union to secure their incomes and futures. In our unity there is strength."

Jimmy Kelly, Ireland Secretary

Royal Institution of Chartered Surveyors (RICS)

"Chartered surveyors agree with the Chancellor that we are not training, building or investing enough and the apprenticeship levy will help address the skills gap in our industry.

"From a Northern Ireland perspective, we welcome the new £3billion road fund, funded by new bands for Vehicle Excise Duty (VED), which will be used on road projects. There will be a benefit to Northern Ireland from this, and we would urge the NI Executive to ensure that this is spent on key infrastructure projects that support the economy and boost productivity.

"Whilst the reduction in UK corporation tax announced by the Chancellor to 18% by 2020 would to some extent lessen the competitiveness that Northern Ireland would gain from a local rate of 12.5%, we would still encourage our politicians to work towards this end. A lower rate of corporation tax for Northern Ireland remains a potentially important means of attracting investment and rebalancing the economy. It is worth noting that the cost to the NI Block Grant of a 12.5% corporation tax rate would now be lower, in light of the planned reduction in the rate at a UK level.

"In light of the announcement in relation to city deals for Sheffield, Liverpool and West Yorkshire, it needs to be explored whether Belfast, as the regional economic driver, would benefit from such an arrangement as a way to unlock regional growth. We would call for a prospectus that provides models that all cities can assess their potential growth against."

Dr Patrice Cairns, RICS Northern Ireland Policy Manager

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