Exchequer Will Cut NI 'Carefully'

NI's budget share from the UK Exchequer will be reduced by £2bn over four years.

That's the bad news emanating from yesterday's meeting between the First and Deputy First Ministers (pictured) and the Chancellor, George Osborne in London.

However, the 'better news' is that Stormont boss, Peter Robinson said they had put the case for NI to be treated with special care, particularly in relation to cuts in capital spending. Deputy First Minister, Martin McGuinness, also said the British Chancellor had agreed to show flexibility in dealing with Northern Ireland, despite Mr Osborne's anticipated 'severe cuts' to public spending on 20 October.

Peter Robinson said: "In what was a very useful meeting with the Chancellor, we again reiterated the need for the UK government to substantively support our efforts to grow the private sector here.

"The Coalition Government in Westminster is already on the record saying that it wants to rebalance the local economy. We will continue to press them to deliver the sort of support that will make that happen, we need more than words."

Mr McGuinness said: "We also took the opportunity to emphasis if there were huge cuts to the block grant there would be an almost immediate impact on the wider economy. Less local spending power would have an inevitable knock-on effect for the private sector. Rebalancing the economy would be even more difficult and that is why the Coalition must be careful not to make a bad situation worse.

"Government contracts currently support more than 40% of the construction industry – we have had record levels of spending on infrastructure since devolution, double the amount spent under direct rule."

Warning

The Executive Finance Minister Sammy Wilson has long predicted the local budget could lose as much as £2bn over the next four years and has called for contingency plans to be put in place.

The Ulster Unionist Party has since welcomed the news that the Government will treat Northern Ireland with 'flexibility' in relation to budgetary cuts.

Ulster Unionist Finance Spokesperson David McNarry said last night that it showed how responsibly working with Westminster and that putting NI's case forward is much more effective than what he described as "Sinn Fein's irresponsible approach to the public finances".

"The Ulster Unionist Party has supported a dual response to meeting with the Chancellor and in relation to Northern Ireland we believe that people cannot shy away from the responsibilities that we have locally and within the United Kingdom.

"I now hope that the games and nonsense which Sinn Fein minister's have been playing in holding out until after the 20th October has been set aside and that they will in fact - with immediate effect - consolidate the position on the Executive and turn it into a collective for the better of Northern Ireland."

See: Wilson Sounds Stormont Budget Warning

(BMcC/KMcA)