Chancellor Osborne heralds income tax reduction for 800,000 Northern Ireland taxpayers
A total of 800,000 people here will benefit from an income tax cut in the next two years, Chancellor George Osborne has pledged.
Writing exclusively for the Belfast Telegraph, he described Northern Ireland as "thriving" - but also added that Government financial support had helped stabilise politics.
In his Budget speech yesterday, the Conservative Chancellor said tax exemptions would mean greater fairness in the system.
A hike in the income tax personal allowance will also mean 800,000 people here getting a tax cut by 2017-18. They will gain £182 a year and 35,000 will be removed from income tax altogether.
Mr Osborne said it was now "vital" the Executive presses head with reforms, including pruning the public sector by up to 20,000 jobs, to ensure the financial sustainability needed to go ahead with the corporation tax cut.
He also confirmed legislation would soon be finalised to ensure that investors in planned pilot enterprise zone near Coleraine benefit from tax breaks.
"This is a Budget that delivers on our plan for working people and sets out the next steps in building a stronger Northern Ireland economy," Mr Osborne wrote.
Secretary of State Theresa Villiers argued the Budget would "help to safeguard economic security in a turbulent world.
"Since early 2010 there are over 51,000 more people in work in Northern Ireland, with the unemployment register down 40% from its peak," she added. "This Budget will ensure that Northern Ireland continues to benefit from the Government's long-term economic plan."
But there was negative reactions from politicians and trade unions. Sinn Fein MLA Mairtin O Muilleoir said: "It's clear austerity will continue to be the price of the union with Britain."
SDLP MP Margaret Ritchie attacked the Chancellor's changes to Personal Independence Payments as "shameful", even though they were not mentioned in his address. "His failure to mention the £1.2bn cut to Personal Independence Payment in his statement was no mistake," the South Down MP said. "There is no justifiable reason for this flagrant attack on disabled people. It will drive more people into poverty."
Ukip's sole MLA David McNarry MLA also warned: "The Executive needs to take note of the cut in corporation tax to 17% in 2020 which reduces the differential between Northern Ireland on 12.5% and the rest of the UK. Perhaps more importantly, they should take note that the Irish Republic is planning to levy a Corporation Tax rate of 6.25% on businesses based on intellectual property developed in Ireland."
NIPSA General Secretary Alison Millar added: "In addition to the proposed imposition of a 1% pay freeze for public sector workers until 2020, a further £3.5bn in cuts is forecast, including a freeze on working age benefits. These tax credits are paid to those in work whose wages are too low. The local economy is dominated by such malpractice.
But Colin Neill, chief executive of Hospitality Ulster, welcomed the Chancellor's specific support "for responsible drinkers and our nation's pubs. "The freezing of duty on the likes of beer and spirits is the right thing to do and demonstrates how the Government has prioritised the hospitality sector as a key driver of the economy. If only the Northern Ireland Assembly could show that same level of support, we would not be operating in a legislative environment that is outdated and prohibiting growth or any chance of growth," he added.
And Glyn Roberts of the Northern Ireland Independent Retail Association said: "Overall, this is positive budget for small traders with its emphasis on lowering tax, reforming business rates and supporting the next generation of entrepreneurs."