| 9.6°C Belfast

Budget 2018: The Chancellor's millions for Northern Ireland - city deals, Executive boost and Primark fire support

  • £350m city deal funding
  • £320m for NI Executive
  • £2m Primark fire recovery aid
  • Integrated/shared education pledge
  • Review of VAT and air duty tax on tourism

Chancellor Philip Hammond has delivered his last Budget before Brexit with Northern Ireland in line for a huge multi-million boost.

The Chancellor told MPs that "austerity is finally coming to an end" as he hailed a significant improvement in public finances. He said there would be "larger sums to come" as result of forthcoming spending review.

For Northern Ireland he handed an extra £320million for "a Northern Ireland Executive," £350m for the Belfast City Deal, £2m to help with the Primark Bank Buildings recovery and the bringing forward of £300m projects for shared and integrated education which is funded through the Fresh Start Agreement.

The Belfast city deal project - which encompasses the five adjoining council areas - had sought £450m. They welcomed the council's announcement.

Mr Hammond also pledged to begin formal talks for the Derry city region deal as well as commission work on the impact VAT and air passenger duty (APD) has on tourism in Northern Ireland. He said that while there will be no change, the government will explore "ways to support a successful and growing tourism industry". A working group will be established to consider the practical and legal challenges to changing short-haul APD in Northern Ireland.

The national minimum wages is also to rise to £8.21. While  duty on beer, cider and spirits frozen for a year but tax on wine will rise with inflation and white ciders to be taxed at a higher rate.

Mr Hammond announced a £1billion package of measures over five years to support Universal Credit, and said he was increasing work allowances in Universal Credit by £1,000 a year at a cost of £1.7billion annually, helping 2.4m working families with children and people with disabilities by £630 per year.

“My Budget sends a clear message to the people of Northern Ireland– your hard work is paying off," Chancellor of the Exchequer, Philip Hammond said.

“Thanks to the UK government’s careful stewardship of the economy the public finances are in a much stronger position and national debt is falling.

“This means we have more money to invest in Northern Ireland’s future – including £320 million funding for the Northern Ireland Executive, £350 million for a Belfast City Region Deal and £2 million to support the regeneration of Belfast city centre.”

At a glance - key announcements in the Budget

  • From April 2019, the National Living Wage will rise by 4.9%, from £7.83 to £8.21 an hour.
  • An extra £320 million for a Northern Ireland Executive
  • Chancellor announces £2 million help towards the recovery of Belfast city centre after the Primark fire and the bringing forward of £300m in shared and integrated education projects in Northern Ireland.
  • £350 million for a Belfast City Region Deal to boost investment and productivity, generating jobs, growth and prosperity.
  • Additional £950m for Scottish Government
  • Additional £550m for Welsh Government
  • Fuel duty frozen for ninth consecutive year
  • Duties on beer, cider and spirits frozen.
  • Income tax threshold changes would amount to a tax cut for 32 million people, putting £130 a year in the pocket of a typical basic rate taxpayer meaning  1.7 million have been out of tax altogether and nearly 1 million out of higher rate tax since 2015.
  • Tobacco duty escalator to continue to rise at inflation plus 2%.
  • £1 billion package of measures over five years to support Universal Credit, and said he was increasing work allowances in Universal Credit by £1,000 a year at a cost of £1.7 billion annually, helping 2.4 million working families with children and people with disabilities by £630 per year.
  • Transforming Cities Fund to  be increased to £2.4 billion, with an additional £90 million to trial new models of smart transport;  funding for 10 University Enterprise Zones; £115 million for Digital Catapults in the North East, Northern Ireland, and the South East; £70 million to develop the Defence and National Rehabilitation Centre near Loughborough; £37 million of additional development funding for Northern Powerhouse Rail; and £10 million for a new pilot in Manchester to support the self-employed to acquire new skills.
  • Remote Gaming Duty on online games of chance to be increased to 21% from October 2019 to fund the loss of revenue as maximum FOBT stakes are cut to £2.
  • Air Passenger Duty to be indexed in line with inflation, but no change in the duty rate for short-haul flights.
  • E-passport gates for visitors from Canada, US and selected countries
  • New UK Digital Services Tax, narrowly targeted tax on the UK-generated revenues of specific digital platform business models and designed to target established tech giants which are profitable and generate at least £500 million a year in global revenues.
  • Employment Allowance to be targeted at small and medium businesses with an Employer NICs bill under £100,000 a year from April 2020.
  • Government is abolishing the use of Private Finance Initiative and PFI2 schemes for future projects.
  • New tax on the manufacture and import of plastic packaging which contains less than 30% recycled plastic.
  • Additional £420 million to tackle potholes.
  • £20.5 billion real term increase for NHS in England over the next five years.
  • Additional £1 billion for Ministry of Defence 2018-19 - to boost cyber capabilities and anti-submarine warfare capacity and maintain the pace of the Dreadnought programme.
  • Extra £160 million  for counter-terrorism policing 2019-20

Philip Hammond told MPs that "austerity is finally coming to an end" as he hailed a significant improvement in public finances.

The Chancellor said the Office for Budget Responsibility (OBR) expected "resilient" growth over the coming years.

In the final scheduled Budget before Brexit, Mr Hammond announced am extra £500m for no-deal preparations.

And he hinted that an emergency Budget could take place in the Spring, adding:  "If the economic or fiscal outlook changes materially in-year I reserve the right to upgrade the Spring Statement to a full fiscal event".

In a boost for Mr Hammond:

  • The OBR upgraded its forecast for GDP growth in 2019 from 1.3% to 1.6%, then 1.4% in 2020 and 2021; 1.5% in 2022; and 1.6% in 2023.
  • Borrowing this year will be £11.6 billion lower than forecast at the Spring Statement, at 1.2% of GDP, and is then set to fall from £31.8bn in 2019/20 to £26.7bn in 2020-21, £23.8bn in 2021/22, £20.8bn in 2022/23 and £19.8bn in 2023/24.
  • Debt peaked in 2016/17 at 85.2% of GDP and then falls in every year of the forecast from 83.7% this year; to 74.1% in 2023/24, allowing the Government to meet its target to get debt falling three years early.

Mr Hammond said his Budget was aimed at helping "the strivers, the grafters and the carers" and would pave the way for a "brighter future".

His comments come after Prime Minister Theresa May promised she was ending years of austerity.

Downing Street has insisted that the Budget's spending announcements are fully funded, regardless of whether the UK secures a Brexit deal, in what has been viewed as a rebuke to the Chancellor.

Mr Hammond warned at the weekend that his economic plans depend on a successful outcome to the Brexit negotiations with Brussels.

Speaking in the Commons Mr Hammond said he was promising a "Budget for hard-working families" and told MPs "we have reached a defining moment on this long, hard journey" after repairing the damage to the public finances caused by the financial crash.

Belfast Telegraph