Belfast Telegraph

Lib-Dems clearly had their oar in Chancellor's choices

But the Budget was yet again noticeable for the absence of any major stimulus for Northern Ireland's economy, says Angela McGowan

If Chancellor of the Exchequer George Osborne's Budget yesterday is anything to go by, the Liberal-Democrats have had a little more influence in the coalition Government with the Conservatives than they are usually given credit for.

On the surface, the Budget looks fairly progressive - that is to say that people on the highest incomes will be contributing most towards taxation while those on low incomes will be contributing less.

The Chancellor's reduction in the top rate of income tax to 45p, however, can be seen as a bit risky, given the current economic climate.

The blow to the public finances was softened somewhat by delaying the 5p reduction until next year and, simultaneously, by introducing a raft of alternative ways to extract tax from the wealthiest households.

The introduction of an 'anti-avoidance rule' will be legislated for in next year's Finance Bill and, from today, residential properties owned by companies will face a 15% stamp duty charge when they change hands.

In addition, the Chancellor chose to raise the level of stamp duty on properties sold for in excess of £2m by a further 2%. The country's wealthiest households will also see a cap placed on income tax relief in any given year.

The coalition Government has also pledged to expand the personal tax allowance for basic rate taxpayers to £9,205 by next year - the biggest increase to date in the personal tax allowance.

Because Northern Ireland's economy is characterised by lower wages relative to the rest of the United Kingdom, any moves to reduce income tax for low-income families will always be welcomed at the regional level.

The Chancellor's move to address the so called 'cliff-edge' problem with child-benefit withdrawal was a good one and it should ensure that families who earn just marginally above the threshold are protected from this.

Only families that earn in excess of £60,000-per-annum will have their child benefit fully withdrawn. With small firms also dominating the Northern Ireland economic environment, the Chancellor's goal of simplifying the tax system - by integrating income tax and national insurance contributions - will be a positive one for the local business community here.

However, while George Osborne also announced plans to reduce corporation tax to 22% by 2014, there was no mention in the Budget of Northern Ireland being given further corporation tax autonomy.

This is an issue that has been lingering in the back offices of the Treasury for well over a year now, but it seems to have been buried.

In terms of stimulus for regional economic growth, the Treasury alluded to a new Enterprise Zone for Northern Ireland.

Belfast was also mentioned as one of the top 10 cities earmarked for ultra-fast broadband and wi-fi connectivity, but the details given were scarce.

Yesterday's Budget document also alludes to devolving powers to the Northern Ireland Executive for Air Passenger Duty (APD) and delaying until next year the planned increase in the Aggregates Levy, which would affect Northern Ireland's mining and quarrying sector.

Overall, however, any big stimulus specific for Northern Ireland's regional economy was noticeable by its absence.

Nonetheless, the Chancellor was making all the right noises around support for exports and UK industry - particularly those in the so-called 'knowledge economy' area.

Practical support for life sciences, green energy, technology and creative industries should also be welcomed - and so, too, should the Budget's plans to make technology-transfer from universities to spin-out companies an easier process.

With Northern Ireland also seeking to transform itself into a knowledge-driven economy which can compete internationally, it too will benefit from that UK-wide support.


From Belfast Telegraph