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Budget 2015: It is time for realism and an agreement on welfare, says DUP's Arlene Foster

By Noel McAdam

Published 09/07/2015

Phantom budget: Arlene Foster
Phantom budget: Arlene Foster

Budget changes to working tax credits could impact negatively on people taking up jobs, Finance Minister Arlene Foster has warned.

And despite growth in the UK and local economies, the DUP minister said the outlook for public sector finances in the next year and beyond remains "challenging".

But she welcomed the reduction in the pace of welfare reform - the key issue at the centre of the Stormont stalemate preventing implementation of the benefits changes.

Mrs Foster reiterated that the Stormont parties must now press ahead with the Stormont House Agreement (SHA) reached last December.

"It is now time for the Executive to face the reality of the financial context and agree a way forward on the local implementation of welfare reform, protecting the most vulnerable without crippling public services," she said.

The former Enterprise Minister said the Chancellor's blueprint clearly reflected the UK Government's policy aspirations and should not come as a surprise.

"We have an unsustainable budget position for 2015-16 and we must press ahead with the implementation of the Stormont House Agreement to ensure the delivery of public services to those who need them most."

But she added: "While I welcome the reduction in the pace of welfare reform I have reservations that the changes to working tax credits have the potential to impact negatively on people entering the workplace."

But Secretary of State Theresa Villiers and Sinn Fein remained at loggerheads last night over the impact of the Government's emergency Budget on Northern Ireland.

The Secretary of State echoed Chancellor George Osborne's insistence that implementing last year's SHA, including welfare reform, is crucial.

Mrs Villiers admitted the Budget contained "some tough choices" on welfare but "the changes to personal tax allowances will provide an average tax cut of £82 for over 700,000 people and lift an additional 15,000 individuals out of tax altogether.

But if Northern Ireland is to realise its full potential it is vital that the Executive is able to make the most of the £2 billion of additional spending power on offer from the Government.

"And we have to move away from the insistence of some parties in Northern Ireland that the best option is to continue to trap working age people in a state of low wages, high tax and welfare dependency."

But Sinn Fein MLA Conor Murphy described it as a direct attack on low-paid workers, families and frontline public services.

"We have seen a £12bn reduction in welfare payments with a further £20bn cuts to public services flagged up.

"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," he said.

Ulster Unionist MP Danny Kinahan argued: "We need to see just how many families will be affected by the capping of household benefits at £20,000 outside of London. Then we can have a discussion about what we might be able to do under the block grant to mitigate that pain."

SDLP deputy leader Dolores Kelly likened the Chancellor to a modern day sheriff of Nottingham "robbing from the poorest to sustain handouts to the rich" with an assault launched on child tax credits which would cause particular problems here "because it takes no account of traditionally larger Irish families".

Alliance Employment and Learning Minister Stephen Farry said: "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."

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