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Budget 2021: Rishi Sunak provides £410million for Northern Ireland Executive

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Chancellor of the Exchequer, Rishi Sunak outside 11 Downing Street (PA)

Chancellor of the Exchequer, Rishi Sunak outside 11 Downing Street (PA)

Chancellor of the Exchequer, Rishi Sunak outside 11 Downing Street (PA)

The Chancellor has pledged an additional £410million to Northern Ireland.

Rishi Sunak set out plans to freeze income tax thresholds and increase corporation tax as he began the process of repairing the nation's finances following the coronavirus crisis.

He used his Budget to set out a £65billion spending package this year and next year to support the economy as it recovers from the pandemic.

Mr Sunak said: "Through the Barnett formula, the decisions I'm taking in this Budget also increase the funding for the devolved administrations, by £1.2b for the Scottish government, £740m for the Welsh government and £410m for the Northern Ireland executive."

Mr Sunak told MPs how Northern Ireland had benefitted from the UK coronavirus response and noted that the majority of measures in the budget applied "to all four nations" of the UK.

The Northern Ireland Housing Executive (NIHE) will also be exempted from Corporation Tax from 2020-21 under plans from the Chancellor.

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“Since the start of the pandemic, the UK Government has supported jobs and businesses across Northern Ireland – and this Budget continues our Plan for Jobs through the next stage of our recovery," said Mr Sunak.

"It is also a Budget that invests millions of pounds in Northern Ireland to fuel economic growth and ensure we bounce back from this pandemic together.”

The additional financial support for Northern Ireland comes as the Chancellor also confirmed the furlough scheme would continue until September.

The Northern Ireland Secretary, Brandon Lewis, said the measures undermined the UK Government's commitment to Northern Ireland.

"The decision to extend furlough, self-employment and business support, the Universal Credit uplift, and the hospitality and tourism VAT cut reaffirms those commitments and gives people and businesses the certainty they need to plan for the future," said Mr Lewis.

"Today’s Budget has announced an additional £410m for the Northern Ireland Executive as well as £11m for the Community Renewal Fund and the extension of the Government’s £4.8bn Levelling Up Fund to cover the whole United Kingdom."

Reacting to the Chancellors UK Budget statement, Retail NI Chief Executive Glyn Roberts said:

“Overall, this Budget is a bit of a ‘Curate’s egg’ with a mixture of positive and not so positive measures for the business community in Northern Ireland”

“We welcome the extension of the Furlough scheme until the end of September, but with employers expected to contribute 10% which will rise to 20% in the summer, it does reinforce the need for the Executive to clarify the timescale of its ‘strategy’ of lifting restrictions and allowing businesses to reopen”

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Glyn Roberts of Retail NI

Glyn Roberts of Retail NI

Glyn Roberts of Retail NI

“The Chancellor outlined proposals for a £6k Restart Grant per premises for independent retailers and other businesses - this is something we want our own Executive to introduce in Northern Ireland”

“Rishi Sunak has also introduced a year of rate relief for independent retailers in England and this is something our members expect to be brought forward by own Finance Minister”

“The increase of Corporation Tax could potentially cause problems for our recovery and poses huge questions for the future of Northern Ireland having a similar rate to RoI. That being said, it is welcome that some smaller businesses will be protected from this increase with the maintained 19% small profits rate”

“The big questions arising from this Budget are now directed back to the Northern Ireland Executive and how they are going to use the £410m extra funding to support business as we begin the long road toward a post-pandemic recovery.”

Ulster Unionist leader Steve Aiken welcomed the additional funds for the Executive, but criticised the Chancellor for the increase in corporation tax to 25% and the continued support Protocol, as measures which may act as a "disincentive" to business.

The UUP leader also questioned the Assembly's ability to manage the additional revenue granted through the budget.

"The Assembly spent several days debating and examining the Finance Minister`s budget for the Executive for the early part of this financial year and supplementary estimates," said Mr Aiken.

"What has become clear is that even with an extra £3.3 billion from HM Treasury, the difficulties in managing that budget seem to be beyond the Finance Minister and some other members of the Executive.

"Even with this largesse we are looking at real cuts in policing numbers, we still don`t have support for many of those excluded from existing Covid support schemes and yet again our health service will be deprived of the resources it needs."

The UK's recovery from the economic damage caused by coronavirus will be "swifter and more sustained" than previously thought, Rishi Sunak told MPs as he set out his Budget on Wednesday.

But he warned it would take "a long time" to rebuild and pledged to do "whatever it takes" to support people.

The Office for Budget Responsibility (OBR) expects the economy to return to its pre-Covid level by the middle of next year - six months earlier than they previously thought - but Mr Sunak acknowledged that "coronavirus has done and is still doing profound damage".

He told MPs that despite the £280bn of support already committed to protecting the economy the damage done by the virus has been "acute".

"Our economy has shrunk by 10% - the largest fall in over 300 years. Our borrowing is the highest it has been outside of wartime.

"It's going to take this country - and the whole world - a long time to recover from this extraordinary economic situation. But we will recover."

The Chancellor said the OBR expects the UK economy will be 3% smaller than it would have been in five years' time because of the coronavirus crisis, but that the economy is forecast to grow this year by 4%, by 7.3% in 2022, then 1.7%, 1.6% and 1.7% in the last three years of the forecast.

Belfast Telegraph


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