Budget is a reminder that Northern Ireland benefits from UK financial firepower

There were many headline figures to emerge from yesterday’s budget for the UK.

In Northern Ireland alone the block grant rises to £15 billion with a £1.6bn public services boost

The £400 million New Deal for NI will continue and £70m for small/ medium sized enterprises here.

Air passenger duties will be halved, reducing an unfairness in which travel between NI and Great Britain faces a premium compared to other internal UK movements, because it often involves flying as a way of crossing the Irish Sea.

All in all, there was considerable largesse towards this Province. It was a reminder of how fortunate we are to be part of the United Kingdom, and beneficiaries of its financial firepower, as one of the richest economies in the world.

NI had already benefited from the very generous furlough scheme. But those subsidies, and many other aspects of UK Covid support, were funded at great cost to the Treasury, and the question of how it will be paid remains unresolved.

National debt in the UK was already perilously high going into lockdown in March 2020.

Now it is as if there is a new political consensus at Westminster and Stormont to spend, spend, spend.

Something similar is happening in America, where huge deficits are tolerated, rather than bringing national finances under control – as used to be the aim of conservative movements on either side of the Atlantic. The new thinking is that borrowing is not a waste of money because it leads to investment.

But all the funds swirling around the economy, as well as pent up savings, could lead to sharply higher inflation as the unleashed expenditure competes for limited resources and prices go up. Indeed in some respects that is already the case.

Extra funding for NI is welcome. At the same time, it will be a sad day if a Tory government gives up on fiscal caution. Inflation will erode the value of cash savings and will reward irresponsible borrowers, by eliminating the real cost of their borrowing.