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Northern Ireland 'faces crucial impact' in spending cuts drive

By Michael McHugh

Published 21/07/2015

Some departments face cuts of up to 40%
Some departments face cuts of up to 40%

Cuts of up to 40% to some government spending in Northern Ireland would have a crucial impact, a leading economist said.

Chancellor George Osborne has warned that ministers in unprotected departments would be expected to deliver "more for less" in the Government's drive to save £20 billion over the next four years.

Treasury Chief Secretary Greg Hands is writing to departments to set out plans to achieve savings of 25% and 40% by 2019-20 - in a repeat of what happened at the start of the last parliament in 2010.

Dr Esmond Birnie, PwC chief economist for Northern Ireland, said: "This will have a crucial impact on Northern Ireland because through the Barnett formula the large reductions in spending in London will be translated into reduced funding for the devolved administration."

As part of the efficiency drive, Mr Osborne has signalled that he wants departments to draw up plans to sell off billions of pounds worth of land and other public sector assets.

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Welfare costs risk making Northern Ireland as bankrupt as Greece  

A document setting out the scope of the spending review, which will report on November 25, confirmed additional investment in the NHS.

Dr Birnie said the Stormont 2015-16 Budget remains fundamentally imbalanced.

"The passing of the Welfare Bill in Westminster on Monday night throws into even sharper relief the Executive's impasse on welfare."

SNP stages takeover of Opposition frontbench

Voters who did not back the Tories at the general election deserve better than Labour's refusal to oppose the Budget, the SNP said before staging a takeover of the Opposition frontbench.

Labour abstained on a vote on legislation enacting the Budget just hours after 48 of its MPs rebelled against the party leadership's orders not to oppose the Tories' controversial welfare plans.

SNP MPs questioned why the Opposition, which voted against all the coalition's full budgets at second reading, would not oppose the first all-Tory Budget in nearly two decades at the same stage and then occupied the Labour frontbench.

Its party's members spilled onto the second and third rows - as they further pushed their case as the "actual opposition" to the Tories.

Chancellor George Osborne smiled and nodded towards the SNP contingent as walked near them.

Following the vote, the SNP's Angus MacNeil (Na h-Eileanan an Iar) raised a point of order, joking if the furniture could not be rearranged then the parties should change the seating so the "actual opposition sits in the right place".

Earlier, shadow Treasury minister Barbara Keeley maintained that the most contentious measures in the Budget were not in this Bill, with new limits on tax credits among the policies being brought into force through other legislation.

The Bill has passed its second reading by 301 votes to 75, majority 226, in a division triggered by the SNP after the party's own amendment was defeated by 307 votes to 61, majority 246.

The SNP's Tommy Sheppard, a former senior Labour official, said the country needs a better opposition than his former party is providing.

He said: "I really would urge and plead with members on the Labour benches - the country needs better than this, the people who didn't vote for the Conservative Party - 63% of them - expect them to be opposed in this chamber.

"And even if there's one or two things in this Bill which you find that you agree with, surely the overall rubric and intent of this Bill is to penalise people in this society who you should be standing up for, and I do appeal to you to reconsider you position on this and to come with us in the lobbies tonight as we vote against this Bill at its second reading."

Former first minister Alex Salmond also pushed Ms Keeley on why Labour were abstaining.

Intervening, Mr Salmond said: "What is it about this Budget, this extraordinary regressive Budget makes it such that the Labour Party don't want to support an opposition to it?"

Ms Keeley replied: "I made the point earlier about the characterisation of the Budget, you will have to take my word for it that some earlier budgets, the finance bills contained all the measures in the Budget.

"The situation that we find ourselves in now is that much of this is split, it isn't all in this Bill or in the Welfare Reform and Work Bill, and some of it will come forward as delegated legalisation and there will be plenty of opportunities to bring forward the arguments you have put.

"But opposing at this point isn't the only thing we can do as an Opposition."

Tory Treasury Minister Damian Hinds mocked the splits in the Labour Party, claiming many Opposition MPs had not spoken in the debate to avoid showing disunity.

He said: "Mr Salmond reminded us in a timely intervention that it (the debate) could have gone to any hour but it was not to be.

"We were helped in our timeliness by the Labour Party, I know it's only been a short week so far, but it's not been a great week for Labour unity.

"But they have discovered a new answer to how not to show disunity, which is preferably not to show up at all."

The Bill will return before the Commons in the Autumn for its committee stage.

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