Budget - Is anybody really feeling better off this morning?

Chancellor of the Exchequer Rishi Sunak delivering his Budget to the House of Commons in London. Picture date: Wednesday October 27, 2019. PA Photo. See PA story Politics Budget. Photo credit should read: House of Commons/PA Wire
Gary McDonald Business Editor

ARE firms and families in Northern Ireland waking up this morning feeling they've benefited even marginally from Chancellor Rishi Sunak's latest spending review?

They might debate the Budget's merits over a glass of cheap Prosecco, or as they drink to a theoretical 3p off a pint, or as they relish having a few quid off their next flight to Glasgow or Liverpool in 18 months' time.

But amid a current supply crisis, with empty shelves, soaring food and petrol prices, benefits cuts and rising inflation, few could agree that Sunak's budget prepares us for what he lauded as "a post-Covid age of optimism" or which sets out a compelling vision to deliver a stronger economy.

Yes, there some positives. But while the previously-flagged increase in the minimum wage to £9.50 an hour from next April is great news for the low income employees, it will only further squeeze SMEs which are already on their knees financially due to policy decisions by the Treasury, leaving them out in the cold and largely without adequate support.

It's a measure which will certainly help to reduce poverty in Northern Ireland, but a greater proportion of businesses here will now face yet another cost pressure.

The Chancellor also announced that he will cut the taper rate in universal credit by a bigger-than-expected 8 per cent from 63p to 55p, which means that people will be able to keep some more of the money they earn before their benefits are taken away.

That's a sensible move, reducing the disincentives for many to increase their hours of work and, in theory, going some way to increasing productivity.

But in the here-and-now, none of the above will, metaphorically, keep people warm this winter, because with inflation set to hit at least 4 per cent, the Chancellor must know household costs will soar and families will suffer.

Sunak's 62-minute speech covered much ground. But given the conundrum of whole UK versus devolved regions, much of the headline stuff can largely be ignored and will be handed over to Conor Murphy and his finance team at Stormont to dissect.

At a macro level, the spending review is providing the Executive with an additional £1.6 billion a year on top of its annual baseline funding of £13.4 billion. Northern Ireland is also receiving an additional £235 million this year.

Digging down into the Red Book, the spending review provides the Executive with £1 billion for farmers and land managers and £9.3 million to support fisheries.

There's also £49 million tol be allocated to Northern Ireland via round one of the Levelling Up Fund, including upgrades to electric vehicle charging networks, the redevelopment of a derelict MoD site in Derry into an urban community farm, and into improved sports facilities in Portrush

Some £300,000 will be allocated to the Glens Digital Hub in Cushendall from the first round of the Community Ownership Fund while a new trade and investment hub will be established in Belfast, which will ensure the benefits of the UK’s global trade policy are channelled to Northern Ireland.

The government is also continuing to deliver on existing commitments including £617 million for four City and Growth Deals, and the £400 million New Deal for Northern Ireland which invests in infrastructure, which will potentially boost economic growth and increase competitiveness.

All very good . . . though whatever way you read into it, things are stilling feeling tougher this morning.

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