Jeremy Hunt delivered a budget yesterday which in some media quarters got a good response and others a not so great response, depending on which side of the fence they were on. So we thought we would look at some expert views from people in Northern Ireland to see what they thought the budget delivered and what they would have liked to have seen. Jeremy Hunt’s focus was very much on bringing down inflation to a manageable level, looking to bring it down to under 3% by the end of this year, so it will be interesting to see if he can hit this target. Hunt also lauded the fact that the UK had not entered a technical recession.
Welcoming A Continued Focus On Supporting Inclusive Growth
But here are what some experts in Northern Ireland thought of the budget, as copied from an article on the Insider Media website:
Gillian McAuley, president of NI Chamber, welcomed “the continued focus on supporting inclusive growth”.
“From removing barriers to the workplace to incentivising investment, the test for this package of measures will be whether it is capable of swift and accessible delivery that stimulates growth at pace.
“As we work to develop Northern Ireland’s dual market access to the EU and UK as a unique opportunity for growth, on its face the investment allowance is welcome. However, to be competitive we need to see more from the government to harness the potential advantage that the Windsor Framework offers.”
She added: “There is also little in today’s announcement that will provide comfort to businesses struggling with energy costs. We know that as many as 4 in 5 of our members experienced energy cost increases in excess of 30 per cent in Q4 22, so it is still at the top of NI business concerns. Although prices have fallen lately, flexible support for energy which accounts for further shocks to the wholesale energy price is crucial.
“Of course, one of the challenges with Westminster budgets is that many of the measures which will be applied to catalyse inclusive growth will be areas of devolved policy, including childcare. As a key part of our economic infrastructure, the test for a new executive will be how it can match or indeed better, the measures announced today for England.”
New Tax Measures Broadly Positive For Business
Aisléan Nicholson, partner at Deloitte in Belfast, said many of the Chancellor’s tax measures had been heavily trailed in the days leading up to the Budget, “but those that are new should be broadly positive for business”.
“As anticipated, there are no changes to the corporation tax rate already announced, which for larger companies means a move to 25 per cent corporation tax rate from the end of this month as reconfirmed in the autumn statements, and the super-deduction (which was designed to ensure businesses didn’t defer capital expenditure until the higher tax rate applies) also expires as previously announced,” said Nicholson.
“However, for Northern Ireland businesses, the loss of the super-deduction will be offset by the move to a 100 per cent first year allowance for the next three years, with a view to this being made permanent. In effect, this means full expensing of capital expenditure on qualifying assets (including IT equipment, plant and machinery) in the year of expenditure.
“For companies investing in special rate and long-life assets, they will benefit from a 50 per cent First Year Allowance during this period and when taken in combination with the permanent setting of the Annual Investment Allowance at £1million from the autumn, this should continue to encourage capital investment. This will be important for maintaining investment by and subsequently the productivity of many local businesses.”
Finally PwC’s NI economist, Greg Boyd, said: “It is positive news for Northern Ireland that the UK as a whole is no longer forecast to experience a recession this year, while inflation is forecast to continue to fall from its recent peak. Today’s budget also touched on key areas that PwC NI has long highlighted; including the need for sustainable economic growth, supported by investment in productivity and skills.
“It was reassuring to hear the Chancellor’s measures to ease cost of living pressures, which are still a critical issue for people in NI, and also his longer-term focus on key levers for economic growth here, including stimulating investment, getting more people into work, and underpinning all of this with the importance of skills and education.
He added: “Our analysis shows that households in Northern Ireland are on average more exposed to recent inflation, in particular on energy and food prices. It is therefore welcome that the Chancellor has announced a greater level of support in the short term, protecting households from continued high wholesale energy costs.
“Further announcements by the Chancellor will help to support household budgets – including freezing fuel duties for the next twelve months and reducing duty on draught in pubs.”
There has definitely been some positive news over the last few weeks which leads us to believe there may just be better days for us all not far over the horizon.