Budget 2010: View from Northern Ireland

Continuing our series of reports ahead of the budget, we're looking at what Scotland, Wales and Northern Ireland can expect; looking now at Northern Ireland.

Wednesday’s Budget will take place amid somewhat contradictory signals on the Northern Ireland economy. Last week’s unemployment figures showed Northern Ireland performing better than the UK as a whole, with unemployment at 6.3% compared with the UK rate of 7.8% and 13.3% in the Republic of Ireland.

In December, the Northern Bank said Northern Ireland had “pulled out of recession in the second half of 2009”, slightly ahead of the rest of the UK. However, Ulster Bank Northern Ireland warned the recession is continuing to hit Northern Ireland harder than other UK regions.

Following the annual visit to the US to mark St Patrick’s Day, ministers from Stormont were able to announce significant new investment from businesses in America, who now see Northern Ireland as a stable place to invest following the successful vote to devolve policing and justice powers.

Indeed, the UK government itself will also invest £800 million to support policing and justice. Given this, Northern Ireland can clearly be seen to have weathered the recession slightly better than Scotland and Wales. However, one clear difference that has emerged is the governments’ attitudes to cuts.

In Scotland, an SNP government has made clear that they do not support the principle of cuts, the same stance as that adopted by Plaid Cymru, coalition partners in Wales. In Northern Ireland, the only devolved body with a finance Minister from a conservative party, the DUP’s Sammy Wilson, the Government seems to be ahead of the game.

In January, Left Foot Forward reported the finance minister had already published for consultation plans to make savings in the 2010/11 budget for the executive worth £367 million, despite the clear anger of the Ulster Unionist Party health minister, Michael McGimpsey. Given this, those watching the budget will concentrate on two areas.

Firstly, following the vote at Stormont to devolve policing and justice powers, political leaders in Northern Ireland will look to the budget to build on the progress that has been made, ensuring the UK government provides the finance to make Northern Ireland an attractive place to invest in. As Northern Ireland secretary Shaun Woodward said at the Labour party conference last year, a deal would provide the certainty needed for US firms to spend their money.

Secondly, all eyes will look to the block grant. Prior to the pre-Budget report last year, Mr Wilson raised his concerns that the block grant from Westminster to Stormont could be cut by £100 million. Whilst this did not happen, Northern Ireland, along with the devolved bodies in Scotland and Wales, will look to Alistair Darling on Wednesday to keep the block grant in tact.

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