Friday, 14 March 2008

There is more to life than government spending – and devolution

The Government spin doctors will be pleased with how the Budget was reported in Northern Ireland. A number of Executive Ministers rushed to welcome aspects of the Budget – particularly extra Government spending that will apply to Northern Ireland. In many ways the response brought home the limitations of both devolution but more notably the parochial perspective of the media here.

The Budget’s ‘extra £21m’ for Northern Ireland was trumpeted by the media – doubtless working off a Treasury press release. I failed to find anything other than a passing mention of the fact that corporation tax on small businesses is going up from 20 to 21%. Given that Northern Ireland has a disproportionate reliance on small business and is apparently seeking to build the private sector here this was a curious oversight – particularly by a media that has given acres of coverage to a simplistic campaign to lower the ‘headline’ rate of Corporation Tax (the one paid by large businesses like those who own papers, radio and TV stations) in NI.

No mention, as far as we could see, either of the abolition of the 10% income tax rate – which given our lower pay rates will have a disproportionate impact here. These measures alone coupled with the increases in tax on fuel and vehicle excise duty – Northern Ireland has a disproportionate reliance on heating oil and the car - will far outweigh any gains for NI.
Given the state of economy, however, the general opinion is that there was little else Mr Darling could do.

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