The Chancellor of the Exchequer, George Osborne has set out the next stage of his economic plan for Northern Ireland, with an ambitious Budget designed to make the UK fit for the future at a time of increasing global economic uncertainty.
Northern Ireland is thriving as part of the UK. Since early 2010, employment has grown with 51,000 more people in work and lower unemployment. Earnings grew faster than any other UK region over the past year.
The Budget confirms an additional £220 million of funding through the Barnett formula for the Northern Ireland Executive, thanks to the prioritisation of frontline services and support for business through the rates system in England.
The Budget also announces that the income tax personal allowance will be £11,000 from April this year, and increase to £11,500 in 2017-18. The income tax higher rate threshold will be £43,000 this year and rise to £45,000 in 2017-18, a £2000 increase. These changes mean that by 2017-18, 800,000 individuals in Northern Ireland will gain by £182 and a total of 35,000 individuals will have been removed from income tax altogether, compared to 2015-16. 14,000 individuals will no longer pay the higher rate of income tax compared to 2015-16.
The government also remains committed to the devolution of corporation tax rate-setting powers to the Northern Ireland Assembly – but in producing a budget after the May elections, the Executive need to demonstrate continuing progress towards sustainable finances if we are to meet their 2018 ambition.
The government has supported the Northern Ireland Executive with significant additional funding and flexibility as part of the Stormont House Agreement and Fresh Start implementation plan. The Executive’s 2016-17 budget demonstrates that this money is being spent to improve infrastructure, including major road schemes and Belfast city centre transport projects. Northern Ireland will also benefit from a range of additional support set out in the Budget including:
- £4.5m funding towards a helicopter emergency medical service (HEMS) for Northern Ireland.
- Legislation to ensure that investors in the Executive’s pilot Enterprise Zone near Coleraine will be able to benefit from Enhanced Capital Allowances.
The Chancellor of the Exchequer, George Osborne said:
If the UK is to be fit for the future, we need to ensure our great nations have real incentives to grow the private sector, and reap the rewards when they do.
So my Budget today puts the next generation of Northern Ireland first with a tax cut for over 800,000 people by 2017-18 thanks to an increase in the income tax personal allowance and higher rate threshold.
But we haven’t stopped there. I’m delighted to announce that we are providing £4.5 million towards the launch of a Helicopter Emergency Medical Service for Northern Ireland – it will no longer be the only region of the UK which does not benefit from this life-saving service.
A thriving Northern Ireland is crucial to our plans to ensure we are providing economic security to everyone across the UK and with earnings growing faster than any other region we must continue to back its strengths to make it fit for the future.
This is a Budget that delivers on our plan for working people in Northern Ireland and sets out the next steps in building a stronger Northern Ireland economy.
The Secretary of State for Northern Ireland, Theresa Villiers, said:
Today’s Budget will help to safeguard Northern Ireland’s economic security in a turbulent world. People across Northern Ireland will particularly welcome the delivery of our manifesto commitments to raise tax thresholds for basic and higher rate taxpayers, delivering tax cuts for over 800,000 people. I am delighted that the Chancellor has also been able to provide significant support for the Helicopter Emergency Medical Service for Northern Ireland.
Since early 2010 there are over 51,000 more people in work in Northern Ireland, with the unemployment register down 40 per cent from its peak. This Budget will ensure that Northern Ireland continues to benefit from the Government’s long term economic plan and from being part of a strong United Kingdom which is set to be the fastest growing advanced economy in the world this year.
Over the past year this Government has taken great strides in helping to deliver greater political and financial stability in Northern Ireland through the Stormont House and Fresh Start Agreements. This Budget will take us further towards our goal of a brighter, more secure future for Northern Ireland.
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