Maybeth Shaw, BDO NI Tax Partner provides her response to the Chancellor's Autumn Budget;
“Set against the backdrop of the menacing, ever-present threat of Covid, this Budget was always going to be difficult for the Chancellor.
“When you add to the mix the spiralling cost of living, the supply issues hitting businesses and consumers alike on top of the recent and very un-Conservative hike in National Insurance, it is fair to say that Rishi Sunak was starting from an incredibly difficult place.
“The Chancellor made a point of highlighting, on numerous occasions, that this budget is a ‘budget for the whole of the UK’, declaring that devolved administrations have receieved their biggest ever block grants since devolution in 1998.
“From the levelling up fund, Northern Ireland will get an extra £50m in addition to the usual Barnett Consequential. The Chancellor further highlighted that the Northern Ireland Executive would receive £1.6billion. What does this look like for local spending plans in NI? Time will tell.
“The NI Executive will plan their budget over a three-year period, a welcome change to the yearly budgets they have been navigating in recent times. Whilst there seems to be a commitment for the bulk of any ‘new money’ to go to the health service there will be a wrangling within government departments for whatever additional funds are left over.
“Acceptance from the Chancellor that inflation is likely to stay for the medium term, with an expectation that it could reach 4% over the next year. This is particularly important when considering the proposed pay rises for millions of public sector workers, recently announced.
“Closer to home, there was some ‘red meat’ for local businesses as well as local families.
“The universal credit taper will be cut by 8% (from 63p to 55p) – a welcome support to working families who are facing increasing costs across the board.
“After years of campaigning, our local airports have succeeded in getting Air Passenger Duty reduced for flights between NI, England, Scotland and Wales. This is an important step towards levelling the playing field with RoI and should be a welcome boost to our beleaguered aviation and wider tourism sector.
“A £70m boost for local SMEs will support the business community in their investment aspirations as well as supporting those starts up who have been hampered by the pandemic, which will go some way to supporting economic recovery.
“We’ve seen the business community across NI voice concerns relating to skills, recruitment, rising business costs, inflation, and increased wage demands, particularly across the services and manufacturing sectors.
“In an effort to address driver shortages across the UK, Mr Sunak announced a freeze on the duty to heavy vehicles – how this will contribute to wider driver shortages across the UK is not clear. The scaling up of the Visa system is aimed at aiding businesses to bring in highly skilled individuals, allowing them to compete on a global scale.
“The lowering of alcohol duty on lower strength drinks is expected to reduce the cost of a pint by 3pence – a small but welcome support to the hospitality sector.
“The next steps of our local politicians will be to allocate this funding within their multiyear budget with significant competing demands of rebuilding our public services whilst facilitating much needed economic prosperity. Over to our Finance Minister and his Executive colleagues”.