Editor's Viewpoint: Plenty of pain but no relief in sight
Published 21/05/2010 | 08:00
We cannot say that we haven't been warned. The visit by new Prime Minister David Cameron to the province yesterday left us in no doubt that we will have to share the pain when it comes to paying off the UK's monumental debt.
While the cuts in public spending - and inevitably in services - may not take place immediately, it is imminent. The initial savings demanded of around £200m can be deferred until the next financial year since budgets have been set and spending plans drawn up.
However, that may be a false economy as much deeper cuts are expected in the autumn when the new Government plans to introduce really tough measures. That would leave the province facing a double-whammy of cuts in the next financial year. And those will be really painful.
First Minister Peter Robinson warned that the Executive may even have to consider selling off assets to protect front-line services, something of a nightmare scenario as Northern Ireland has not got too much family silver to finance future spending plans. It is important that Ministers at Stormont begin planning for the inevitable now, no matter when they decide to introduce the cuts.
The new Government has made it clear that Northern Ireland is too reliant on the public sector - accounting for about 70% of the economy. But at least it is not going to try to rebalance the economy too quickly, which would be disastrous. Secretary of State, Owen Paterson, suggested that it might take 25 years to achieve a fair public-private sector balance, which seems a reasonable estimate.
However, one disappointment is the new Government's reluctance to spell out its intentions on reducing corporation tax to stimulate inward investment or the creation of enterprise zones here, another way of boosting the private sector. Since public spending and services are going to be hit hard, which will have a disproportionate effect in the province, private sector incentives are vital.