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NI gets funding increase from Westminster

Chancellor of the Exchequer George Osborne delivers his Autumn Statement to MPs in the House of Commons

Chancellor of the Exchequer George Osborne delivers his Autumn Statement to MPs in the House of Commons

The amount the Northern Ireland Executive receives from Westminster to fund public services will increase by £136 million over the next two years.

Much of the extra money from the Treasury is pledged because health and education services, which cover the major part of Northern Ireland spending, are protected from cuts affecting Whitehall departments.

However, Northern Ireland Secretary Theresa Villiers warned the economy was not as robust as in the rest of the UK.

“There is a recognition that the recovery in Northern Ireland, whilst it is under way, is not as strong as the rest of the UK and that is one of the reasons why the Executive and the Government signed the economic pact,” she said.

“We recognised that we need to make extra efforts in Northern Ireland.”

Dissident republicans have targeted Belfast city centre for bombing attempts and loyalist protests over restrictions on the flying of the Union flag from the City Hall have also cost traders dear.

Chancellor George Osborne delivered his Autumn Statement in the Commons today, announcing a future increase in the state pension age and the abolition of employer National Insurance contributions for under-21 year olds.

Northern Ireland’s extra public service funding was calculated through the Barnett formula, which governs how the devolved nations in the UK are funded by Westminster.

Northern Ireland is under pressure from Whitehall to agree welfare savings funded from the Department for Work and Pensions, which could see major changes in benefits for the out of work.

Ms Villiers said Northern Ireland would see the direct benefit of other measures announced by the Chancellor, like cancelling a rise in fuel duty for motorists.

“I think that is going to be a real help with the pressure of cost of living,” she added.

Stormont Finance Minister Simon Hamilton said Northern Ireland people would also benefit from an increase of £2.95 per week in the state pension from April 2014 and a new married couples tax allowance, which will help 130,00 couples. Abolition of National Insurance contributions for young workers could save local businesses around £10 million.

The minister noted additional rates support for English businesses, in particular the £1,000 discount for local retailers, and promised to consider its merits in Northern Ireland once matters were clarified.

Mr Hamilton added: “The publication by the Chancellor of the Exchequer of the broader fiscal implications of tax changes is potentially significant.

“If he is prepared to take the same approach in terms of the potential devolution of corporation tax powers it could reduce our costs considerably.”

Irish Congress of Trade Unions (ICTU) assistant general secretary Peter Bunting claimed the Chancellor had signalled more stagnation for Northern Ireland.

“Capital spending on infrastructure has been cut to the bone, and now we are seeing the impact of the cuts on current spending, especially through welfare reform,” he said.

“The poor are still being punished, and the young poor are the hardest hit, with the added burden of knowing that they can never rest until they reach 70.”

 
 
 

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