Calls for Chancellor to tackle 'long-term problems' in Budget
The Chancellor has been urged to address the long-term problems thwarting economic growth in Northern Ireland and the rest of the UK when he publishes his Budget tomorrow.
Under-pressure Philip Hammond will reveal the contents of his Budget in the House of Commons tomorrow - the first time in over 20 years that the complete plan is unveiled in the autumn instead of the spring.
Business advisory firm PwC has predicted that the much-discussed cut in corporate tax for Northern Ireland from the UK-wide rate of 20% to 12.5% will be as "remote as ever" following tomorrow's Budget.
And Ann McGregor, the chief executive of the Northern Ireland Chamber of Commerce and Industry (NI Chamber), said he must resist the temptation to give "short-term giveaways".
Instead, Mr Hammond -who's received flak from the Brexiteers in the Conservative Party over his pro-Remain stance - should "focus his firepower on big measures that address the long-term structural issues which continue to thwart investment, productivity and growth across the UK including Northern Ireland".
"The Budget is more vital than most as the Government must set the foundations of our economy post-Brexit," Ms McGregor said.
"Whilst of course businesses want the best possible Brexit deal, if we don't create the conditions for growth at home, businesses won't be in a position to meet the challenges, or take advantage of the opportunities, of our new place outside the EU."
But Dr Esmond Birnie, senior economist at the Ulster University, said there could be a boon in Northern Ireland in the form of a small addition to public spending.
"Such a positive Barnett consequential is likely to be small (less than £100m in one year and possibly less than £50m - in the March 2017 Budget there was £120m over three-four years)," he said.
"The Chancellor will be able to be more generous if he decides to push the previously stated target of a balanced budget in the next Parliament back by a few years."
Dr David Armstrong, a partner in business advisers PwC in Belfast, said Northern Ireland was facing deep-seated problems which were not capable of a quick fix in the Budget. Despite a fall in the unemployment rate, employment was falling and economic inactivity was rising, he said.
"Low productivity overall, a regional export market that concentrated amongst a handful of larger companies and wages that have failed to keep pace with inflation complete the reasons why we are trailing the rest of the UK," he added.
"We're hoping the Budget will deliver some incentives to boost productivity as well as looking to the Industrial Strategy White Paper, due next Monday, which will cover the UK's so-called grand challenges intended to address a number of global trends, including artificial intelligence and the data economy."
And Janette Jones, a tax partner at PwC in Belfast, said the Chancellor should aim to focus where possible on "targeted, low cost, simple but popular tax changes".
"Tax breaks for the young, funded by cuts to pension tax relief have been suggested, but more likely are amendments to the Lifetime ISA which was launched in April aimed at people under 40," she added.
The firm suggested the Chancellor would stick to plans to cut corporate tax to 17% by 2020 UK-wide - though a cut to 12.5% for NI was further away than ever.
Writing in today's Business Telegraph, trade union umbrella group Ictu said it was using the week of the Budget to launch a campaign for better pay and standards for the public and private sectors in Northern Ireland.