Belfast Telegraph

Editor's Viewpoint: Osborne's Budget is not good for us

We shouldn't be surprised that George Osborne's Budget has a strange feel to it, being the product of a Frankenstein coalition whose two parts do not neatly conjoin.

Hence the chancellor pressing ahead with the archetypal Tory policy of cutting the 50% tax rate for the rich at a time when the poor are feeling the pinch like never before.

He then worked a typical smoke and mirrors trick by raising the entry tax threshold, helping the lower paid, while decreasing the 40% tax threshold, hitting the middle classes.

Of course, Mr Osborne had little real money to play with in these austere times, so every gain has to be offset in the main by a loss somewhere else in the system.

His credibility depended on how skilfully he balanced the books and the sectors hit by his measures. He scored an enormous own goal with his decision to abolish by stages the higher personal tax allowances enjoyed by pensioners.

That is being heralded as a stealth granny tax - and - like the cut in the 50% tax rate - is hugely unpopular with the general public.

Even Ed Milliband, hardly regarded as a clown prince of national politics, was able to poke fun at Mr Osborne and his Tory colleagues in the Budget debate, deriding them for being totally out of touch with ordinary people.

And it has to be said that Mr Osborne left himself wide open to such attacks, even if his Budget contained several good measures.

As far as Northern Ireland is concerned, the investment in high end television production and in providing ultra-fast broadband is to be welcomed. But the thorny question of corporation tax rates remains.

The reduction in the rate paid by large businesses will have little effect in a region where most businesses are small, and we still lag well behind the rate in the Republic where corporation tax is 12.5% compared to 20% here.

The Government signalled its intention to move to regional pay rates for public sector workers - a move which this newspaper has already branded as potentially very damaging to the local economy given that 220,000 depend on state pay.

We do not have a vibrant or big private sector to make up for any shortfall caused by pay freezes in the public sector. Cuts in benefits will also hit a benefit dependent region.

While accepting that Mr Osborne was never going to deliver a giveaway Budget given the state of the UK's finances, it is still one which is unimpressive - particularly in regard to Northern Ireland.

Any gains are likely to be wiped out by stealth taxes or measures - like a mooted public sector pay freeze - which could damage the entire regional economy.


From Belfast Telegraph