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18/03/2004
Mixed response to Budget announcements
There were mixed emotions in Northern Ireland today following yesterday's Budget speech by Chancellor Gordon Brown.
While many were unsurprised by the rise in tariffs on beer and cigarette, it was the announcement that 40,000 civil service jobs are to go that really knocked many observers for six.
PricewaterhouseCoopers (PwC) chief economist Philip McDonagh said that the province had little to celebrate: “The Chancellor says we are enjoying our best economic performance in 200 years, but it doesn’t feel like it. He has tinkered with the VAT threshold, capital allowances, the aggregates levy, and he froze income tax, corporation tax and excise duties. However, not raising taxes hardly calls for a day of national celebration.
“In a region where public expenditure accounts for the equivalent of 61%of GDP, the news that 40,000 public sector jobs are being axed across the UK could be a bleak message indeed.”
The Ulster Society of Chartered Accountants also said there was very little for Northern Ireland business in Wednesday's Budget announcement.
John Hannaway, Chairman of the Ulster Society said: “Overall this was a disappointing Budget for Northern Ireland. The local business community has made repeated calls for regional incentives and tailor-made fiscal policies aimed at boosting the local economy, but these have fallen on deaf ears.
“This missed opportunity, combined with the potential of job cuts in the public sector, will have a negative impact on Northern Ireland. Meanwhile, the duty increase on red diesel, which is planned for September of this year, will undoubtedly adversely affect the local agricultural sector."
UUP Chief Whip Roy Beggs, however, welcomed the news that the Government's Education budget us set to rise by 4.4%.
He said: "The Ulster Unionist Party very much welcomes the substantial increase announced today to the Government's Education Budget.
"Indeed, the Chancellor indicated that Education Funding will rise by 4.4% and is expected to reach a total of £77 billion by the year 2007-08. We are particularly pleased that additional funds for schools will be given directly to the Principals, allowing them direct influence on how money should be spent."
NIO Minister, Ian Pearson said the Chancellor's Budget contained "a series of measures that will promote greater prosperity, flexibility and fairness for all in Northern Ireland".
“I am encouraged that differential regional impacts will be taken into account at an early stage.
“Further measures to tackle employability in enterprise areas, including the Business Premise Renovation Allowance, will benefit the 237 most deprived wards in Northern Ireland.
“The extension of eligibility for the VAT cash and annual accounting schemes could benefit 400 eligible businesses in Northern Ireland.
“The introduction of a new definition of research and development from 1 April 2004, will make it easier for small and larger companies, undertaking R&D in Northern Ireland, to claim the credit."
However, it was left to PwC's Philip McDonagh to summarise what many people felt about Wednesday's Budget announcement. “In summary, this is another Budget where Northern Ireland’s particular regional problems failed to fit with the Chancellor’s overall fiscal strategy," he said.
(MB)
While many were unsurprised by the rise in tariffs on beer and cigarette, it was the announcement that 40,000 civil service jobs are to go that really knocked many observers for six.
PricewaterhouseCoopers (PwC) chief economist Philip McDonagh said that the province had little to celebrate: “The Chancellor says we are enjoying our best economic performance in 200 years, but it doesn’t feel like it. He has tinkered with the VAT threshold, capital allowances, the aggregates levy, and he froze income tax, corporation tax and excise duties. However, not raising taxes hardly calls for a day of national celebration.
“In a region where public expenditure accounts for the equivalent of 61%of GDP, the news that 40,000 public sector jobs are being axed across the UK could be a bleak message indeed.”
The Ulster Society of Chartered Accountants also said there was very little for Northern Ireland business in Wednesday's Budget announcement.
John Hannaway, Chairman of the Ulster Society said: “Overall this was a disappointing Budget for Northern Ireland. The local business community has made repeated calls for regional incentives and tailor-made fiscal policies aimed at boosting the local economy, but these have fallen on deaf ears.
“This missed opportunity, combined with the potential of job cuts in the public sector, will have a negative impact on Northern Ireland. Meanwhile, the duty increase on red diesel, which is planned for September of this year, will undoubtedly adversely affect the local agricultural sector."
UUP Chief Whip Roy Beggs, however, welcomed the news that the Government's Education budget us set to rise by 4.4%.
He said: "The Ulster Unionist Party very much welcomes the substantial increase announced today to the Government's Education Budget.
"Indeed, the Chancellor indicated that Education Funding will rise by 4.4% and is expected to reach a total of £77 billion by the year 2007-08. We are particularly pleased that additional funds for schools will be given directly to the Principals, allowing them direct influence on how money should be spent."
NIO Minister, Ian Pearson said the Chancellor's Budget contained "a series of measures that will promote greater prosperity, flexibility and fairness for all in Northern Ireland".
“I am encouraged that differential regional impacts will be taken into account at an early stage.
“Further measures to tackle employability in enterprise areas, including the Business Premise Renovation Allowance, will benefit the 237 most deprived wards in Northern Ireland.
“The extension of eligibility for the VAT cash and annual accounting schemes could benefit 400 eligible businesses in Northern Ireland.
“The introduction of a new definition of research and development from 1 April 2004, will make it easier for small and larger companies, undertaking R&D in Northern Ireland, to claim the credit."
However, it was left to PwC's Philip McDonagh to summarise what many people felt about Wednesday's Budget announcement. “In summary, this is another Budget where Northern Ireland’s particular regional problems failed to fit with the Chancellor’s overall fiscal strategy," he said.
(MB)
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