Amendment of the Law

Mark Durkan Excerpts

Monday 23rd March 2015 Commons Chamber

[Mark Durkan (Foyle) (SDLP)]

I rise not to make any party political points on the Budget, with regard to parties formerly or currently in government, but to respond to a Budget statement that was full of smuggery and spin. It seems to me that the Chancellor was claiming circumstantial credit for things such as low commodity prices and low inflation and using that context to set out a Budget stall that was very much about making an election statement. However, I need to look at such a Budget and ask what the implications really are for the next spending period and for my constituency.

Beyond some of the measures that the Chancellor announced, not all of which I disagree with—indeed, some of them no one would disagree with—it is quite clear that he has locked in further heavy cuts for the next spending period, not least in welfare. I represent a constituency that is consistently ranked as having the highest level of unemployment anywhere in the UK, and the problem is genuinely lack of work, not lack of work ethic. It is also a border constituency. We must therefore judge the measures in the Budget and in what is promised for the next spending review, courtesy of the previous autumn statement, in terms of the implications for our economy and our services.

It is not the case that the Budget has little to do with the circumstances in a place such as Derry because all the key service decisions are devolved. Many of those decisions are rightly devolved, and I want to see more decisions made at that level, but of course the spending power of the devolved Executive is determined here, and of course the working circumstances for many of our businesses as well as our services are still determined by the Chancellor’s Budget statement.

The hon. Member for Birmingham, Edgbaston (Ms Stuart) pointed out that the Chancellor said nothing in his statement about the health service. I agree with her, but actually he said very little about the public services at all, and in circumstances in which he was using a degree of spin and a few wheelie turns to try to say that austerity was coming to an end earlier and that an easing was in sight. Nothing was offered to the people in key public services who have endured pay restraint after pay restraint, even as their work loads have increased. As payrolls have decreased and work loads have increased, the pressures on them have gone up and the rewards have gone down. With the exception of what they can find in the changes in the personal tax allowance, absolutely nothing—not relief or respite—was offered to them. Instead, they are being offered more of the cuts that will affect the circumstances in which they are working very hard to provide those services.

It must be remembered that the private sector in Northern Ireland, and certainly in my border constituency, is very dependent on selling across the border, and in circumstances in which our trade is affected, so our retail sector and those selling services to households are losing out because, with the current exchange rate, trade is going across the border and people are purchasing across the border, rather than locally. For those who export, much of their business is in the south, and obviously the continuing pressures in the eurozone and the high exchange rate affect those markets. The Budget therefore contains no great news for our public sector, on which Northern Ireland is very dependent, and nothing to relieve the pressures faced by our private sector.

The Chancellor referred to the Government’s moves in relation to corporation tax for Northern Ireland and the Corporation Tax (Northern Ireland) Bill, which we welcome. We recognise that the Chancellor made it clear that he is committed, if he is returned to that position, to go on reducing the headline rate of corporation tax for the whole of the UK, so the differential that we will achieve for Northern Ireland will not be as marked as it was when people first sought the devolution of corporation tax. We also know that the Government are saying that the commencement of the devolution of corporation tax in 2017 will only be on the basis that the Treasury is satisfied at that point that Northern Ireland has a balanced and sustainable budget.

We see this year that the Government set out pre-conditions for the introduction of the corporation tax Bill, such as that the Assembly had to deliver welfare reform measures in terms that it might have preferred not to. The question arises whether the Executive and the Assembly will similarly be told in 2017 that what will then be the corporation tax powers Act will be activated only on the basis of decisions then made, such as the welfare cuts to be imposed at that time. We know that £12 billion of welfare cuts are foreseen in the next spending review period, so again we have to ask where that is going to leave the Executive in Northern Ireland and, more importantly, people in my constituency.