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Northern Ireland's £100m loan from Treasury shows we can't put our house in order


Liam Clarke

Liam Clarke

Liam Clarke

Accepting the Chancellor's bailout is not that different in principle from the Republic accepting the EU-IMF bailout four years ago when its finances hit the wall.

The amounts are different, the Republic needed £53bn and we have only received £100m. The loss of autonomy is similar though, and it could escalate beyond anything that happened in the Republic if our political class can't take control.

At the end of this month our Executive has to submit its budget for approval. If it doesn't pass muster then the shutters will start to come down. Rather than advancing us money the Treasury or local civil servants could start taking over from the elected officials.

They could then manage our budgets directly as they prepared for direct rule in consultation with the Irish government which is just emerging from its own austerities.

That being said, there is no doubt that Simon Hamilton and Peter Robinson played a very weak hand with maximum effect and have bought us some time despite the humiliation involved.

Yet, however you cut it this is demeaning. We have to keep on the right side of the Government at a time when the Scots are raising their own taxes and balancing their own books. In the forthcoming all-party talks, the British Government will have more leverage than before because the local politicians have had no option but to place themselves in hock to it.

That could have the positive effect of making agreement likely if our politicians act logically.

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There is no doubt that, having got ourselves into this mess, the alternatives could have been worse. If we had broken our budget as seems likely the UK government could have dealt very harshly with us.

Instead of offering us a loan to keep the lights on it could have imposed penalties and taken promised goodies like power over corporation tax off the table. Theresa Villiers, the Secretary of State, had already hinted that there might be no point in giving us more taxation powers if we couldn't handle it.

A review of how we get our money, how little we raise locally and how much more we spend than other UK and Irish regions would not work to our advantage.

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