Belfast Telegraph

Monday 22 December 2014

Editor's Viewpoint: Cold comfort from Osborne's chill wind

Appropriately given the current weather, the Chancellor's Autumn Statement provided cold comfort for Northern Ireland.

The scrapping of a proposed rise in fuel duty and a minuscule boost to the capital spending budget were mere scraps of good news. The real bad news was that austerity measures are likely to continue until 2018 and since Northern Ireland has hardly suffered any real cuts to public expenditure to date, it is likely to feel the pinch more acutely in the coming years.

Given the state of the economy here, we hoped in vain for some bold and imaginative measure to kick-start job creation and offer hope to the one in five young people currently out of work.

There is still no news on devolving responsibility for corporation tax to the province or phasing out air passenger duty, two initiatives seen as vital to future prosperity.

Instead, the welfare benefits changes will have a disproportionate and detrimental effect on the local economy.

No one is pretending that benefits which act as a disincentive to work are a good thing and no one is denying that there is an apparent abuse of disability allowances here, but there is an impression that the Government is more keen to claw back benefits, even from those who genuinely cannot find work, than to tackle the issues of income tax and VAT avoidance or even evasion.

Clamping down on those issues would raise billions and deny the claims that it is the poor who are having to pay for past government profligacy.

While the Stormont Executive has fairly limited powers, it must show a new inventiveness within its financial straitjacket to boost the economy as much as possible.

That means it must work to cut out waste within departments. And while we are at it, we do not believe that a huge pay rise for the chief executive of Invest NI is justified no matter how talented he is. Can he really be worth a salary more than the Prime Minister?

The old mantra that he and his ilk could earn more in the private sector doesn't hold water any more in these times of austerity.

The Government must be careful with the message it is sending out.

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