Summer budget fails to stimulate employment in Northern Ireland

I was in the Commons yesterday to witness the first Tory budget in nearly 20 years. It took over an hour for the Chancellor to outline his plans, but what he said will affect our lives for many years. I am disappointed that the Chancellor made little reference to Northern Ireland in his budget and no reference to job creation across the North.

Talk of the cuts being eased in, or graduated over a longer period doesn’t hide their existence. It is clear that the further cuts to welfare will be as brutal as the last round, making life increasingly difficult for unemployed people, disabled and sick people and low income families.

The Chancellor seems to be operating on the basis that cutting welfare spending and increasing the personal tax allowance will drive people into work. The missing step in this logic is that our problem in Northern Ireland is a lack of work for people to seek.

Far from boosting the local economy these plans threaten to dampen local demand and hamper our regional economy. The consequences are yet unknown on the block grant which the Executive receives. The proposals to continue to limit the public sector pay rise to one present per annum is effectively a wage cut for those who often are the lower paid in our public services such as health and education.Those who work and depend on tax credits to top up their low wage will also be concerned about the Chancellor’s proposals and I fear will place many families in real financial hardship. Public sector workers, people in receipt of tax credits spend money locally, if they don’t have the money, its bound to have an impact.

The SDLP will be asking that the Department of Finance and Personnel officials provide a briefing on the impact of the budget on public spending in Northern Ireland and indeed the impact on the ongoing discussions around welfare reform. The Chancellor’s announcements have yet to be worked out in full but its hard to see it striking the right balance in maintaining an adequate safety net while stimulating economic growth.”

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