The public finances, ‘the deficit’, and the extent to which Northern Ireland is dependent on public spending have been much explored and discussed topics over the past 11 years since the Credit Crunch. We have also had access to a wide range of data on the state of the business sector, from the range of surveys by business bodies and others right down to individual filings by businesses at Companies House. But despite consumer spending accounting for two-thirds of GVA (gross value added – i.e. Northern Ireland’s total income), there has perhaps been relatively less discussion on the finances of the Northern Ireland consumer, in part due to an absence of relevant insight on the topic.
Today’s Budget speech may not have been the most exciting ever, but it was possibly the most future-focused. Indeed, Philip Hammond used the word ‘future’ 33 times at the dispatch box this afternoon, and focused heavily on measures relating to, for instance, first time homebuyers, the technology sector, electric cars. In contrast, there was no mention of pensioners and little to appeal directly to that particular demographic. This perhaps marks a new era of more youth-friendly Budgets. Continue reading
Tax has been a big talking point in recent years – we’ve had the sugar tax, the pasty tax, the plastic bag tax, and even the caravan tax. And locally, corporation tax long hogged the headlines. Some tax changes have been significant, others have been gimmicks. But the reality is that when it comes to dealing with the public finances, spending cuts rather than revenue-raising have been doing the heavy lifting. This dynamic though is about to change, and the contents of the recently launched party manifestos underline this. Continue reading
Chancellor Philip Hammond surprised those anticipating a boring Budget by littering his speech with jokes and gags. However, there were definitely none of the pyrotechnic policies that were prominent in the last Chancellor’s Budgets (e.g. the sugar levy), as the substance of ‘Spreadsheet Phil’s’ announcements lived up to his nickname. And, needless to say, the state of the public finances remain no laughing matter. Continue reading
Chancellor Hammond’s first Autumn Statement will also be his last. From now there will be a solitary annual Budget event per year. Its swansong was a low key affair. The financial crisis still casts a long shadow with the deficit reduction road lengthened again. But it didn’t stop a regrouping for a new attack on economic public enemy number one – poor productivity.
Northern Ireland has the lowest taxes in the UK and the highest public expenditure per head of any region. Together, these form Northern Ireland’s fiscal USP (unique selling point). This approach to public finances, however, has arguably not served the economy well (and is unsustainable – read my previous article on the subject). Furthermore, given the ongoing austerity agenda, Stormont will have to redouble its efforts in making public expenditure efficiencies and increasing revenue. Continue reading