Spring Statement 'should have gone further', NI politicians say
- Published
Finance Minister Conor Murphy said the chancellor should have scrapped his planned increase in relation to National Insurance
The chancellor's Spring Statement provides "nowhere near enough support to people and businesses struggling with the rising cost of living", Finance Minister Conor Murphy has said.
Rishi Sunak has promised to cut the basic rate of income tax by the next general election in 2024.
He also sought to protect lower-earners from the impact of April's National Insurance increase.
Mr Murphy said Mr Sunak "should have gone further".
"Despite inflation being at a 30-year high, the chancellor is tinkering on the edges," Mr Murphy added.
"Increasing the threshold for National Insurance contributions will help mitigate the impact of the hike on workers on the very lowest incomes, but the chancellor should have gone further by scrapping his planned increase in National Insurance entirely."
Mr Murphy said the 5p reduction in fuel duty for motorists was "minimal" and would bring little comfort.
The minister said Northern Ireland would receive £34m through the Barnett formula next year.
What is the Barnett formula?
For 42 years, public spending across Northern Ireland, Scotland, England and Wales has been based around something called the Barnett formula.
In principle, the way this works is extremely simple.
When the UK government decides to spend more or less on things such as health and education in England, the Barnett formula is used to decide how much money the other nations receive.
For example, if health spending increases by £100 per person in England, the devolved governments should receive the equivalent amount.
This exact amount is based on the size of their population
Democratic Unionist Party (DUP) MP Sammy Wilson said the measures taken by the chancellor were welcome but "more could have been done to help".
"It would be churlish not to accept that the chancellor has taken action which will help people who are struggling with the cost of living currently," Mr Wilson said.
"Raising the threshold for National Insurance contributions and the reduction in fuel duty will all make a difference to family budgets."
But he added that it was "disappointing that more wasn't done given the chancellor has had additional tax revenue from inflation and from the quicker than expected recovery in economic growth as we emerge from the pandemic".
"Those could have allowed him to be more ambitious in the assistance provided."
SDLP finance spokesperson Matthew O'Toole accused Mr Sunak of playing "to the Tory tax cutting gallery".
"Rather than focus his tax cuts on those who most need them, he scheduled in billions of tax cuts which will help better off voters ahead of an election - rather than focusing real support on the families and workers who need it now," he said.
Ulster Unionist Party (UUP) finance spokesperson, Steve Aiken, said the chancellor's statement had done "little to alleviate the real pressures being felt by many people due to the cost of living increases".
"For some there will be a degree of relief, but for far too many, the most vulnerable, and many who are now no longer just about managing, today's statement was a real blow," he added.
A VAT cut on environmental goods like domestic solar panels and heat pumps will not immediately apply in Northern Ireland.
The chancellor is cutting the rate from 5% to 0% for Great Britain.
However, VAT is covered by the Northern Ireland Protocol so the Treasury will need to get agreement from the European Commission to extend the move here.
In the meantime, Stormont will receive additional funding equivalent to the value of the VAT cut.
It will be up to Stormont ministers to decide how to allocate that money.
Mr Aiken said the fact that the measure would not apply in Northern Ireland was an "extraordinary announcement".
A VAT cut on environmental goods like domestic solar panels and heat pumps will not immediately apply in Northern Ireland
Mr Sunak delivered his Spring Statement in the House of Commons.
He has come under increasing pressure to act, with prices rising 6.2% in the 12 months to February - the fastest for 30 years.
The chancellor said the forecast for UK's economic growth was now 3.8% for this year and 1.8% in 2023.
He said for the next five years, homeowners would pay 0% VAT on energy saving materials, such as solar panels or heat pumps.
He said he could make the move as a result of Brexit.
- Published23 March 2022
- Published23 March 2022
- Published23 March 2022
