Economic manifesto needed if North to survive cuts

BELFAST BRIEFING:All parties warned that post-election cutbacks in public spending would be unavoidable, writes FRANCESS McDONNELL

WILL HE or won’t he? That is the big question hanging over Northern Ireland.

David Cameron is shaping up to be the person most likely to be making the decisions on where the North’s economy is headed in the immediate future. The decisions will be difficult, inflicting economic pain on everyone who lives in Northern Ireland.

All political parties warned that post-election cutbacks in public spending would be unavoidable. If Cameron succeeds Gordon Brown, he will decide whether the North should be among the first to feel the cold winds of public expenditure austerity.

Northern Ireland receives funding from the UK of more than £9 billion (€10.45 billion) per year. The block grant is the lifeblood of the North’s public-sector dominated economy.

According to the Northern Ireland Economic Reform Group, which is campaigning for lower corporation tax, almost half of government spending in the North is financed by British taxpayers.

It claims the block grant is worth £5,000 to every person living in Northern Ireland. If dramatically reduced, it would create a major hole in the North’s local finances, and have immediate repercussions for key public spending areas such as health and education. Northern Ireland has already suffered reductions in public spending, but the impact of a major cut in the block grant could drastically change the local economic landscape.

During a visit to the North during the campaign, Cameron stated that it would not suffer any major financial cutbacks if the Conservatives came to power.

“There is no way Northern Ireland will be singled out over and above any other part of the UK,” he said.

But last month he had also stated that the North’s public sector was too big, sparking fears of a major funding cull if the Conservative Party were in power.

Given the dismal performance of his party’s link-up with the Ulster Unionist party – the partnership failed to win a single seat in Westminster – he may not be feeling over-enamoured with the North. So where does that leave the Conservatives’ “contract” produced specifically for Northern Ireland?

In it, the Conservatives pledged to deliver a change for the economy and radical plans to deal with record UK government debt and government borrowing. Cameron also vowed to stop the rise of red tape, to lower corporation tax rates and to abolish employment taxes on the first 10 jobs created by new businesses.

This day last week, the Conservative leader stood in Northern Ireland and promised that his party would look at ways of turning the North into an enterprise zone.

“We want to grow the size of the private sector in Northern Ireland to create new jobs and investment,” he added.

The sentiment hit home, even if it did not win the Ulster Unionists votes on the ground, perhaps because there has been a sense of paralysis about the local economy.

Despite official data suggesting the recession is over, there is no evidence that local businesses believe it is. New economic research from Ulster Bank this week shows the number of people employed in the private sector in the North fell again last month, and at the fastest rate since last November.

The number of people claiming jobless benefits rose for the 27th consecutive month in April, and the total number of people out of work is expected to hit a high of 62,500 later this year.

Northern Ireland desperately needs a new economic manifesto if it is to survive the sweeping public sector cuts which are undoubtedly on the horizon across the UK.

Cameron promised to return to Northern Ireland within a week if he became the next prime minister.

It may take him a little longer, but political patience is one of the North’s virtues.

Cameron may not have all the answers if he takes over the job of running the country, but he should know Northern Ireland is now open to suggestions.