Budget Resolutions and Economic Situation

Debate between Damian Collins and Mark Durkan

Thursday 21st March 2013 Commons Chamber

[Mark Durkan]

I fully accept my hon. Friend’s point. The multipliers would get into gear far faster under that sort of measure than under some of the other measures that have been proposed, welcome though they are in their own context.

Certain aspects of the Budget served notice of more pain to come. The Chancellor spoke yesterday about changes that he will be making through annually managed expenditure. That sounds like a dry, technical change, but it will have a significant impact in relation to the controls that are being placed on welfare spending. We have already had the Welfare Reform Act 2012, which changed many of the rules, structures and qualifying criteria for benefits. It was designed in such a way as to allow for wide regulatory powers to place further changes and squeezes on benefits without the need for further primary legislation.

It is clear that, by moving to change the rules relating to annually managed expenditure, the Chancellor is trying to put in place more fixed envelopes for welfare spending. That will have particular implications for the way in which social security spend is managed in Northern Ireland, because the money comes to Northern Ireland not as part of the departmental expenditure limit—the DEL—but as annually managed expenditure. If that is now to be subject to some fixed-envelope procedure and capped in advance, it will put serious stress on the Northern Ireland Assembly. The Assembly is in the bizarre position of having to pass karaoke legislation that has to be exactly the same as that passed here, but it is notionally responsible for the administrative discretion on delivery. That will be a fundamental challenge for us in Northern Ireland, and we all need to wake up to that fact.

We need to be as alert to that challenge as the Executive have been on the case for corporation tax. I can see where the Chancellor is going with that, but his rate of travel in regard to corporation tax UK-wide means that, by the time any concession is delivered to Northern Ireland, the marginal benefits it will give us will be a lot less.

[Damian Collins]

The hon. Gentleman is talking about business. Will he welcome the introduction of the employment allowance, and the benefit that it will bring to small businesses in Northern Ireland?

[Mark Durkan]

Yes, I welcome that. Labour has advocated it as well; it is a good, sensible measure that I know many firms will take up.

Similarly, I welcome the increase in the personal allowance, although it will perhaps not benefit as many people in my constituency as in the constituencies of some Government Members who have mentioned the measure. That is because my constituency has very high unemployment and high rates of economic inactivity. The problem in my constituency is the lack of work, not the lack of a work ethic. I will support any measures in the Budget or anywhere else that will ensure that more people can find work, embrace and express their aspirations and ambitions and make a contribution to their community and society.

The Chancellor is introducing fiscal apps and things in regional and city economies here in Britain that I would like to see our Executive and Assembly emulate at home in Northern Ireland. I would like to see the devolution discretion used a lot more to give us more creative capacity. When I see some of the measures in the Budget, I recognise that there is some constructive engagement to get the economy going again, but we need to get our share of it.