The Minister welcomed the Chancellor’s commitment to work with all parties to deliver the Stormont House Agreement and warned that the local budget context had not materially changed.
The Minister said: “The budget clearly reflects the UK government’s policy aspirations and should not come as a surprise. It is now time for the Executive to face the reality of the financial context and agree a way forward on the local implementation of welfare reform, protecting the most vulnerable without crippling public services.
“We have an unsustainable budget position for 2015-16 and we must press ahead with the implementation of the Stormont House Agreement to ensure the delivery of public services to those who need them most.
“While I welcome the reduction in the pace of welfare reform I have reservations that the changes to working tax credits have the potential to impact negatively on people entering the workplace.”
Arlene Foster concluded: “Despite the promising growth within the UK and local economy as a whole, the outlook for 2015-16 and beyond will continue to be challenging for public sector finances.”
There were a number of specific decisions taken by the Chancellor which will have an impact for many people in Northern Ireland. These included:
Vehicle Excise Duty – Reform of Vehicle Excise Duty designed to target more expensive vehicles with the proceeds to support a roads fund in England. Engagement with devolved administrations on a similar scheme will take place.
Fuel Duty – Fuel duty will remain frozen this year.
Annual Investment Allowance – will be set at £200,000.
Corporation Tax – The Dividend Tax System is to be reformed and Corporation Tax is to fall to 19% in 2017 and 18% in 2020.
Welfare - £12 billion is to be found in the welfare system. This includes a number of changes that will have an impact on the welfare reform issue in Northern Ireland.
Tax Free Personal Allowance – This will be raised to £11,000 next year.
Tax Lock - There will be no changes in the main rates of income tax, National Insurance or VAT.
Income Tax - In future, those working 30 hours a week on the National Minimum Wage will not pay income tax and the higher rate of tax will increase to £43,000 in 2016-17
National Living Wage – To be set at £7.20 in April 2016, to rise to £9 per hour by 2020.
National Insurance Contributions – Small firms will be able to employ 4 people without having to pay National Insurance from 2016.
Notes to editors:
- The Chancellor’s July Budget is in addition to the two main announcements made each year on the UK public finances (March Budget and UK Autumn Statement). This has been the first opportunity for the Conservatives to adjust the Budget to reflect their manifesto policies since the May election.
- The Budget includes adjustments to both public expenditure and tax policy.
- The Chancellor’s July Budget can be viewed in full via the HM Treasury website.
- Media enquiries should be addressed to the Department of Finance and Personnel Communications Office on Tel: 028 9081 6724 or Tel: 028 9081 6725. Out of Office hours please contact the Duty Press Officer via pager number 07699 715 440 and your call will be returned.