Mini budget gets mixed reaction from Northern Ireland parties: Tax cuts welcomed by unionist parties

The Chancellor abolished the top rate of income tax for the highest earners as he spent tens of billions of pounds in what has been dubbed a “gamble” to drive up growth during a cost-of-living crisis.

Using more than £70 billion of increased borrowing, Mr Kwarteng also brought forward a planned cut to the basic rate of income tax to 19p in the pound a year early to April and reduced stamp duty for homebuyers.

He argued tax cuts are “central to solving the riddle of growth” as he confirmed plans to axe the cap on bankers’ bonuses while adding restrictions to the welfare system.

The reaction in Northern Ireland has been mixed.

The SDLP MP Colum Eastwood dubbed the measures a “budget by millionaires for millionaires”, while the UUP MLA Steve Aiken warned of the risks involved for the nation if the sought-after economic growth fails to materialise.

Mr Aiken did, however, welcome the tax relief for the wealthy saying: “In Northern Ireland the cuts in income tax, the abolition of the higher rate of income tax and the reverse in the increase in national insurance contribution will be welcomed by most.”

Sammy Wilson, in a statement issued by his party following the announcement, said: “The commitment to allow people retain more of their money is welcome and will help the economy grow. The reversal of the National Insurance rise is right and a step we have been pressing the Chancellor and his predecessors for. This will put real money back into people’s pockets, helping them pay for the increased fuel and food costs. The rise was never justified.

“Whilst the announcement on Investment Zones sounds encouraging, we need the Northern Ireland Protocol removed and replaced by arrangements which allow Northern Ireland to benefit.

“I am disappointed that the Tax-Free Childcare allowance has not increased from its current 20%. I note the Chancellor’s response however, to my question where he committed that his Ministerial colleagues are looking at the matter. Childcare is an enormous cost for working families. This was a missed opportunity to increase the tax-free allowance which would release parents into the workplace and help childcare providers.”

He continued: “The energy support schemes are welcome but the £100 current proposal for homes heated by oil is not acceptable. I am glad the Government is working on a better support scheme for oil users and will legislate for it in London but time is pressing and we need to see more detail. Oil customers have had a 300% increase in the cost of filling their tanks.

“The failure to bring forward a more effective windfall tax on energy generators is also a missed opportunity to raise more money which could help hard pressed working families. These companies are making colossal profits through no innovative effort of their own but because of global events. They should be taxed accordingly.”

He added: “Similarly there should be more efforts to capture taxes from the online giants who currently pay little to no tax in the UK meanwhile our highstreet retailers are taxed on every front.”

SDLP leader Colum Eastwood, meanwhile, said: “Rather than attempting to help the millions of people across these islands who are mired in a cost of living emergency, what we got from the British government today was a budget by millionaires for millionaires. These plans show just how detached this government is from the desperate situation families are facing. Rather than taking further steps to help people heat their homes and put food on the table this winter we saw a number of measures that will see the rich get richer, while our communities are left in the cold.

“A decision to remove the cap on bankers’ bonuses at a time when many people’s salaries don’t cover their basic necessities is vulgar in the extreme. This is the Tory party acting as they have always done, making sure that their wealthy backers and big businesses are well looked after, without a thought for the rest of us. Trickledown economics doesn’t work, it has never worked and all it will achieve is to widen inequalities at a time when those who are struggling have less than ever before.”

He continued: “Liz Truss’ government have also demonstrated their total disregard for people in the North who they had promised to help navigate this emergency. Offering the majority of people who rely on oil heating an extra £100, when that wouldn’t even be enough to make an order in most places, shows where we feature in their priorities.”

The Foyle MP added: “What people in the North need is real support and they aren’t getting it from Westminster. The SDLP has produced a plan to get 1000l of home heating oil to everyone who needs it, these are the type of solutions that will get our communities through this winter and it’s time that we saw similar political leadership from this government.”

UUP MLA Steve Aiken said: ““The Chancellor’s statement this morning is a radical change of approach for our economy and how we pay for our public services. It is a massive tax adjustment and stimulus, worth over £105Billion. While it may address the energy crisis and help reduce inflation, albeit in the short term, it does create the risk of not delivering the growth the economy needs. The amount of debt that our nation will accrue will be a challenge for many decades to come, particularly if the huge gamble by the Prime Minister and Chancellor doesn’t succeed.”

He continued: “In Northern Ireland the cuts in income tax, the abolition of the higher rate of income tax and the reverse in the increase in national insurance contribution will be welcomed by most. The reversal of the corporation tax increase will also be very beneficial to our businesses. The creation of enterprise and investment zones in England are measures that we should be replicating in Northern Ireland. If we had an Executive, we could be pushing to make Northern Ireland as a whole such a zone.”

The former party leader added: “While it remains to be seen whether VAT free shopping can be applied here because of the Protocol, there is much in the detail of this statement to be cautiously supportive of – if it can be applied here, and if - and it is a big if - it does create the conditions for GDP growth rates of 2.5%”