NO TAX CUTS? BLAME BORIS!

▪ Paschal Dono­hoe says No-Deal plans mean no tax cuts ▪ John­son rules out ‘North­ern Ire­land only’ back­stop plan ▪ Scot­tish court says sus­pen­sion of UK par­lia­ment il­le­gal

Irish Daily Mail - - Front Page - By Cate McCurry

THERE will be no in­come tax cuts in the forth­com­ing Bud­get, as the Fi­nance Min­is­ter pre­pares next year’s spend­ing plans on the as­sump­tion of a No-Deal Brexit.

Paschal Dono­hoe said he had to work on the ba­sis of No-Deal to give cer­tainty to busi­nesses and peo­ple, to safe­guard the na­tional fi­nances and to avoid the hav­ing to re­verse de­ci­sions in the fu­ture.

His warn­ing came yes­ter­day as UK Prime Min­is­ter Boris John­son ruled out a North­ern-Ire­land-only back­stop, thus pre­vent­ing the North from keep­ing the benefits of the com­mon mar­ket.

But Mr John­son’s govern­ment was also dealt a blow when a Scot­tish court ruled that the shut­ting down of par­lia­ment to avoid a Brexit de­bate was un­law­ful and

even sug­gested the prime min­is­ter had gone as far as mis­lead­ing the Queen over his rea­sons for the sus­pen­sion.

The Scot­tish Supreme Court ruled that he had or­dered the par­lia­ment shut down for five weeks in or­der to ‘stymie scru­tiny’ of Brexit. The rul­ing could see Mr John­son forced to re­call par­lia­ment if it is up­held by the Bri­tish Supreme Court when it hears the case on Tues­day.

Mean­while, speak­ing on a Face­book live chat with the Bri­tish pub­lic, Mr John­son said: ‘We will not ac­cept a North­ern Ire­land-only back­stop.’

Mr Dono­hoe ruled out cuts to in­come and per­sonal taxes, adding that changes to the tax code will be ‘min­i­mal’.

Speak­ing af­ter brief­ing the Cab­i­net in Dublin, Mr Dono­hoe said: ‘As­sum­ing a No-Deal Brexit en­sures the Govern­ment

‘We’ll in­tro­duce timely, tar­geted mea­sures’

has the nec­es­sary re­sources at its dis­posal to meet the im­pact of this ex­cep­tional chal­lenge whilst pre­serv­ing the longert­erm sus­tain­abil­ity of the pub­lic fi­nances.’

He said that in­creases will be made to so­cial wel­fare pay­ments that will aid the most vul­ner­a­ble.

‘We will have a so­cial wel­fare pack­age in the Bud­get but it will be dif­fer­ent in scale to pre­vi­ous years,’ Mr Dono­hoe said.

‘The Govern­ment will, of course, put in place the re­sources that are needed to sup­port cit­i­zens at a time of change and dif­fi­culty, and to put in place the pro­vi­sion that may be needed to ac­com­mo­date a re­duced tax take due to fewer peo­ple at work. We will also have the pro­vi­sion in place to in­crease so­cial wel­fare sup­ports and fund­ing due to a tem­po­rary in­crease in un­em­ploy­ment.

‘We will also, in that phase of the Bud­get, in­tro­duce timely, tar­geted and tem­po­rary mea­sures for the sec­tors of our econ­omy that could be, and will be, af­fected by a No-Deal Brexit tak­ing place.’

In what he de­scribed as a ‘safe and care­ful Bud­get’, Mr Dono­hoe said it will fo­cus on en­sur­ing the Govern­ment has the re­sources it needs to be ready for a shock at the end of Oc­to­ber when the UK is due to leave the Euro­pean Union.

Asked whether he will rule out tax cuts, the Fi­nance Min­is­ter said that tax changes in next year’s bud­get will be ‘min­i­mal’.

He added that while there are of­ten cases and the need to make per­sonal tax de­duc­tions, he was not go­ing to take that de­ci­sion for Bud­get 2020. ‘For Brexit, I’m not go­ing to do that,’ he said. ‘I am go­ing to make a set of very safe choices in re­la­tion to tax­a­tion and I am con­fi­dent that even with the dif­fer­ent pres­sures we will have to deal with through the year, that we will de­liver our sur­plus.

‘I want to en­sure that we are max­imis­ing the re­sources that are avail­able to help cit­i­zens, fam­i­lies and com­mu­ni­ties that could find them­selves deal­ing with real change as a re­sult of a No-Deal Brexit tak­ing place. I will have to make changes in our per­sonal tax code to deal with a po­ten­tial change in the min­i­mum wage.

‘There are the kinds of changes that I still want to en­sure that I make, but my pri­or­ity is go­ing to be mak­ing our na­tional fi­nances as ro­bust as pos­si­ble to en­sure that if we do face a chal­lenge in 2020 that we are best placed as pos­si­ble to deal with it.’ Mr Dono­hoe said that while the Govern­ment had com­mit­ted to a bud­getary pack­age of €2.8bil­lion, it could still go be­yond that.

The Govern­ment may have to put in place re­serves to make more benefits avail­able to the un­em­ployed. ‘That would have the case of mov­ing it be­yond the €2.8bil­lion frame­work but I’d em­pha­sise that would only take place in the con­text

of a No-Deal sce­nario,’ he added. The In­sti­tute of Di­rec­tors wel­comed the min­is­ter’s de­ci­sion af­ter its re­cent survey found that 89% of se­nior busi­ness lead­ers think the Govern­ment should de­liver a ‘con­ser­va­tive bud­get’.

IoD chief ex­ec­u­tive Maura Quinn said: ‘The un­cer­tainty ev­i­dent over the past 12 months has in­ten­si­fied in the last quar­ter and busi­ness lead­ers’ op­ti­mism in the econ­omy has dropped 31% year-on-year.

‘The mes­sage is clear, Ir­ish busi­ness lead­ers are wor­ried and they want the Govern­ment to take note and de­liver ac­cord­ingly in next month’s Bud­get, which is just w eeks be­fore the current Brexit dead­line.’ [email protected]­ly­mail.ie

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