Autumn Budget 2024: Northern Ireland 'looks set for cuts or yet more over-spending' says economist Esmond Birnie
A Northern Irish economist has said that the Province is facing either the prospect of slashed public budgets or yet another over-spend.
Esmond Birnie was giving his take on the budget, ahead of it being officially delivered in Parliament at around lunchtime today.
Among the things that have already leaked out about the budget are that the minimum wage for those aged 21-plus will rise from £11.44 to £12.21 from April 2025.
Dr Birnie, senior economist at Ulster University and a former UUP MLA, gave the News Letter his view on what Northern Ireland would take from the budget.
"Particular attention usually focuses on the ‘Barnett Consequential’ – ie, the extra public sector funding the NI executive gets (usually roughly NI’s population as a percentage of England).
“This time, unusually, we have been given advance notice of the size of that consequential: finance minister Archibald has indicated £500m.
"However, even that will be smaller than the indicated new spending needs of NI departments, at about £760m.
"So we are heading into another period of either enforced spending cuts (as the Scottish government has already had to do with its budget) or a return to over-spend.
"The latter would be immensely serious as the Executive previously built up an over spend of about £550m. HM Treasury has said they will ‘write off’ that previous debt but that is conditional on Stormont having a viable stabilization plan.
"More generally, expect a close-to-record (for peacetime and certainly for the last 30 years) hike in UK tax of about £35-40bn.
"Much of this will almost certainly be higher National Insurance charges. In the first instance, this will be paid by businesses (hence Starmer/Reeves can claim, technically, not ‘working people’) but there will eventually be implications for terms of employment (wages) and job numbers.”