A Flawed Budget Underpinned by Huge Borrowing
NI Politics

A Flawed Budget Underpinned by Huge Borrowing

Below is the speech of TUV leader Jim Allister during Tuesday’s budget debate:

“There is nothing prudent, balanced or reasoned about the Budget. It is a Budget that was cobbled together, not informed by good financial management, not informed by a clear, united vision of where the Government want to go but informed only by the necessity of cobbling together something in order to keep the Executive on the rails. Where it takes us is a secondary consideration; it was all about whatever it took to hatch this mishmash of proposals to apply the sticking plaster a little more to Stormont. It is no surprise, then, that it is such a flawed document.

“You have just heard from the previous Member to speak — I am sure that it came as a surprise to the Minister — that Sinn Féin negotiated £500 million for shared education. There was our Finance Minister thinking that he had a hand in it, but it seems not. What, of course, Sinn Féin did not tell us was that it has to go hand in glove with the Treasury to spend the money. Maybe the Finance Minister will expand on how that expending arrangement will work. As I read and understand the arrangements, it seems to be that the strings attached to this £500 million very much mean that you have to get the consent of Mother Treasury. It is interesting to see Sinn Féin put itself in that position.

“Of course, the net outcome is that this whole Budget is underpinned by huge borrowings that take us to that most unenviable place of being the devolved region with the highest level of borrowing per head of population anywhere — £1·8 billion and rising, as we embrace the folly of uncosted corporation tax and as we embrace the folly of perpetually underwriting no welfare reform and continuing to top up losses there from the block grant. The borrowings are likely to go in only one way. Of course, that will not concern Sinn Féin, because it is happy to bankrupt Northern Ireland. That fits entirely with the mantra of the failed political entity. They have no intention of looking for prudence or good government. They are not in government to give anyone in Northern Ireland good government. It is no surprise, then, that, when they get the opportunity, they are happy to bankrupt Northern Ireland and then Greek-like, with the biggest begging bowl they can find, they will look to the rest of the world and say, “Everyone owes us a living. Everyone must rescue us. Everyone must write off our borrowings that we foolishly ran up”. That is the mentality of those who tell us that they shaped the Budget, which is leading us in very much the wrong direction.

“Let us think about welfare reform. There is a distinct opaqueness in the Budget about how the new cost of welfare reform will be paid. Some things are pretty clear: we will continue, it seems, to pay 6,600 families in Northern Ireland benefits in excess of the cap of £26,000. We will continue to keep them at the standard to which they have become accustomed on public handouts, and we will do that, it seems, in perpetuity. How many millions, therefore, into the future is that? Who knows? If the cap in GB drops to £23,000, as is anticipated, at current figures, we will sustain undiluted benefits to 12,000 families. How will we pay for it? Well, quite clearly there is no new money from Westminster to pay for it, so it has to come out of the money for health, education, roads and everything in the block grant.

“The choice that the Finance Minister and his colleagues have made is to fund all that by prejudicing expenditure on the real needs that are catered for in the block grant. That is an albatross that has been fitted around the neck of Northern Ireland for years to come. That is along with the unspecified cost of reducing corporation tax, which again will raid the block grant to an unspecified but, nonetheless, huge amount. Yet we have the silliness of an Enterprise Minister telling us that lower corporation tax will put £3,000 in wages into everyone’s pocket — such patent, unproven nonsense. That is some of the spin that attaches to this. Here we have corporation tax being negotiated, but, when you ask the Finance Minister, as I have, to tell us the Department’s estimate of how much was raised in corporation tax in Northern Ireland for the 2013-14 financial year, the answer is, “Sorry, we don’t know”. How then, Minister, did you negotiate in any informed way with the Treasury in the absence of such essential data? That is a further reason why I think that the whole idea around corporation tax is ill thought-out and ill produced. We will reap pretty horrendous consequences, I suspect, in the further raiding of the block grant.

“This is a Budget of the Executive. But is it? We are in a unique position in the western democratic world where you can be in government, it seems, and yet vote against the very Budget of that Government

“It is unthinkable and unheard of anywhere else and indicates, of course, the absolute folly and stupidity of the system of government.”

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