Budget generosity to NI might be bid to soften backstop deal

Morning View
Morning View

The Chancellor Philip Hammond yesterday unveiled what seemed like a giveaway budget.

He announced money for key public services across the UK, including health and social care.

He unveiled tax cuts via methods such as the increase in the taxation allowance.

He confirmed a further increase in the minimum wage.

With regard to Northern Ireland, Mr Hammond was particularly generous, offering what appeared to be £1 billion in extra funding, including a welcome announcement on a city deal for Belfast (although that overall sum is a crude calculation, much of which will be released in varying contexts).

Any extra money for the Province is always welcome, even though we already are generously subsidised.

The DUP yesterday claimed victory for the funding, while Stephen Farry referred to ‘the elephant in the room’. The Alliance deputy leader meant Brexit, and his party’s belief that it will cause economic damage, cancelling out the largesse.

Even those who reject that analysis, and many people do, believing that a nation as dynamic as the UK will ultimately soar when freed from the shackles of the EU, should be concerned as to where all this money is coming from.

Britain has a huge and growing debt pile. The deficit has been cut thanks to the fiscal responsibility that is often called ‘austerity’ but that fall merely means that the debt is rising at a slower pace than before. Some growth projections make that debt pile look less menacing than it otherwise appear.

But there is another ‘elephant in the room’ aspect to Brexit that should be of concern to unionists, which is the backstop.

London has not signed off on it, but periodically seems inclined to do so, on largely the EU’s terms (latterly there is talk about using language that disguises the impact). The EU wants Northern Ireland never to be outside its regulatory or customs zone, which would be a very bad outcome. Is this why Mr Hammond is being particularly generous to NI, softening us up before a backstop is set in stone?