Business gives thumbs-up to Budget despite growth fears
£650m boost for NI and bonuses for first-time buyers, pubs, clubs and restaurants but clouds gather on horizon as economic forecast slashed sharply
NORTHERN Ireland’s capital city, the hospitality sector and first-time home buyers were the big winners in yesterday’s autumn Budget.
Chancellor Philip Hammond revealed Northern Ireland would get a £650m budget boost over the next three years.
Mr Hammond also retained a commitment to a lower rate of corporation tax for the region and pledged £3bn for Brexit preparations.
On top of that, discussions on a “city deal” for Belfast are to open, and pubs and restaurants will reap the rewards of a freeze on the price of the majority of beer, wine and spirits sold here.
Colin Neill, chief executive of Hospitality Ulster, said: “The decision helps protect our pubs. Given that we already had a tax increase on alcohol less than 12 months ago, a further increase would have been a disaster.”
But the economic growth forecast for the UK as a whole was cut to 1.3%, down from the 1.5% predicted previously.
There was a glimmer of hope that air passenger duty (APD) — a £13 tax on most flights — would be cut, with the Chancellor saying the benefits of slashing the tax would be examined.
But airline Flybe said it was disappointed there was no immediate announcement on APD.
Elsewhere, the national living wage will rise by 4% to £7.83 next April.
First-time buyers will avoid the cost of stamp duty on purchasing their home after the charge was removed for properties costing up to £300,000.
While some buyers will undoubtedly benefit, Ulster University senior economist Dr Esmond Birnie said “any impact in Northern Ireland would be smaller, given the relatively low level of average prices”.
“This has been a year of two UK Budgets and, indeed, two budgets for Northern Ireland in November — Brokenshire’s and now Hammond’s,” Mr Birnie added. “For Northern Ireland, it is a bit like the old joke about buses — two Budgets have come along in November.”
Wilfred Mitchell, policy chair at the Federation of Small Businesses, said it had been a ”business-friendly Budget”.
“The Chancellor’s vision for an inclusive economy includes a set of measures that will boost confidence across the small business community as they face extremely challenging trading conditions,” he added.
John Armstrong, managing director of the Construction Employers Federation, said the Budget reflected “welcome uplifts in Northern Ireland’s capital expenditure over the coming three years”.
Ann McGregor, chief executive of the Northern Ireland Chamber of Commerce, added: “While the Chancellor allocated an extra £650m to Northern Ireland
over the next three years to 2020, there is no Executive in place, so it is unclear how the money will be spent and where the priorities lie across key areas including the economy, infrastructure, health and education.
“We are relieved that the Government remains committed to giving the Northern Ireland Executive the power to set the rate of corporation tax. But this will only happen once a restored Executive demonstrates its finances are on a sustainable footing. Subject to this, the Government will consider an announcement in 2018-19 on implementing the regime.”
David Reaney, director of indirect tax at EY, said his firm welcomed “the opportunity to further consider the impact of VAT and APD on tourism in Northern Ireland.”
Angela McGowan, CBI director in Northern Ireland, said it “was good to see the Chancellor focus on some of the longer-term drivers of economic success such as skills, R&D, infrastructure and investment”.
“Despite the huge focus on Brexit right now, it is important for us not to neglect the foundations of economic growth,” she added. “Building a skills system that supports the fourth industrial revolution is the right ambition but we need to make sure that the approach is both stable and joined-up.”