Belfast Telegraph

Sunday 31 August 2014

Budget 2010: Where Northern Ireland will feel the pain hardest

A number of factors make Northern Ireland's economy particularly vulnerable to the measures in yesterday's emergency Budget. These include:

Public sector jobs

According to the Government's most up-to-date statistics, 28.8% of the workforce here is employed in the public sector. That involves some 220,000 people and represents the highest share of any UK region.

It compares to 23% in Scotland, and 23.9% in Wales. The overall UK average is 19.8%, with the south-east of England having the lowest figure of 17%.

This means the two-year public sector pay freeze is expected to hit Northern Ireland hardest, affecting tens of thousands of workers and their families — as well as the businesses that benefit from their spending.

The pay freeze will only kick in for employees on over £21,000 a year. It is estimated two-thirds of the province’s 220,000 total earn above this threshold. In real terms their spending power will shrink as inflation — and a VAT rise — puts prices up.

Squeeze on benefits and education spending

These plans are also likely to have significant implications for Northern Ireland.

The province has a higher economic inactivity rate among working age people than any other UK region. According to the latest Government figures, the inactivity rate here stands at 26.7%, while the UK average is 21.5%.

The province's inactivity rate includes students and people not working due to sickness and disability.

Chancellor George Osborne yesterday announced a new medical assessment for Disability Living Allowance claimants.

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