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
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