Why Northern Ireland got a good deal out of Mr Osborne
David Elliott believes we've fared reasonably well in an austerity Budget based on miniscule economic growth
Published 21/03/2013 | 00:00
Never mind the "aspiration nation" which the Chancellor was trumpeting loud and clear during his Budget speech, what the nation needed yesterday was an aspirin, such was the level of heckling in the Houses of Parliament as George Osborne spoke.
During the early part of his oration he was probably quite glad to be hiding behind a wall of noise because letting the nation know that you've cut your growth expectations for the UK economy is never going to be well received.
It might not sound like much, but Mr Osborne's crack commando team of economists at the nattily-titled Office for Budget Responsibility (OBR) cut next year's growth forecast to 0.6% from 1.2% previously. Most of that embarrassingly small amount of expansion will be accounted for by London and the south east of England, an area which seems to have dismissed these recessionary times with a shrug of the shoulders, and that means the OBR probably thinks our economy in Northern Ireland will shrink in 2013.
On a roll with the unpalatable news, we were then treated to a quick explanation of where the Treasury would get the money it needs in the second half of the speech, one which turned out to be jam-packed with tax cuts, incentive schemes and yet more jeering from all political sides.
Unsurprisingly, a further tightening of the belt by Government departments was announced, but it was by 1%, rather than the expected 2%.
Northern Ireland Government departments get off lightest with only a 0.2% cut, according to the Northern Ireland Office.
Given that Northern Ireland has the highest level of public-sector employment of all UK regions, this seems a little skewed, although it's been estimated that the cuts will still amount to a hefty £40m.
The other main way of raising money seems so obvious that you have to ask yourself why it wasn't done before.
Cracking down on tax avoidance was not something you would have thought held much potential, but as the last few months have shown, there seems to have been plenty of taxes slipping through Her Majesty's Revenue and Customs' gloved fingers.
However, tax avoidance, unlike tax evasion, isn't illegal, so would it not be easier and more effective to just change the law?
Having taken with one hand, the Chancellor was now in generous form and spilled forth with the detail of how he was going to give, much of which was already on the London Evening Standard's front page, having been accidentally released early on Twitter. Most pertinent for us as individuals was the ramping up of the tax-free allowance on our salaries to £10,000 instead of the £9,400 previously planned.
It's not something we should be proud of, but people in Northern Ireland will benefit more than other UK regions from this measure, with 7,000 additional workers lifted out of paying income tax altogether.
Working parents will also benefit with a pledge to cover 20% of childcare costs, a scheme which should help 80,000 families in Northern Ireland who are somehow managing to look after 130,000 children under the age of 12.
Meanwhile, those wanting to buy a home are to be given a leg up with an equity guarantee scheme which means that first-time buyers in Northern Ireland will need only a £5,000 deposit.
While this will be welcomed by the property market and home buyers alike, there are certain parallels with the pre-credit crunch years. Was it not highly leveraged lending in the property market then which got us into this recessionary mess in the first place?
Whatever your thoughts on that particular subject, there's no doubt that the construction industry will also welcome any move to boost housing.
It should also be able to take advantage of the extra £3bn allocated to infrastructure construction until 2015, around £94m of which should be allocated to Northern Ireland.