Analysis: SF slashing business tax creates less money for welfare
From the heady days of Sinn Fein's pledge that it would not allow any current or future benefit claimants to lose any money, the fine detail of what Martin McGuinness settled for will be a shock to some of those set to lose welfare money.
Far from the blanket protection promised, the proposals outlined yesterday represent a partial and time-limited scheme, meaning that many benefit claimants will lose money – though it is still a more generous system than anywhere else in the UK.
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The scheme runs over four years, but, contrary to what many observers had expected, the mitigation fund will only pay out to individuals for the first year after their benefits are cut.
Sinn Fein has, however, managed to win the argument with the DUP about adding much of the money set aside for those who would have lost out under cuts to tax credits to the pile to go towards offsetting the initial welfare reforms.
Nevertheless, that small victory comes after a much larger admission of defeat.
As things stand, Sinn Fein faces the prospect of slashing corporation tax for big businesses in April 2018 (under its deal with the DUP), something which will create such a big hole in the Executive’s already diminishing budget that it will be more difficult to even renew the current limited welfare package when it runs out two years later.