Clarke's cost-cutting gloomy news for economy in North

THE British Chancellor Kenneth Clarke's budget could cost Northern Ireland 3,000 jobs, accountants Coopers and Lybrand have warned.

Mr Philip McDonagh, Coopers and Lybrand principal economist in Belfast, said the budget would do little to win the confidence of the Northern business community.

Mr Clarke's determination to cut 7 per cent off central British government running costs could threaten 3,000 jobs over the next three years, if strictly applied to the North, he said. The North's economy is highly reliant on public sector jobs and government spending.

"The Chancellor delivered a budget for `Middle England', not Northern Ireland. The Province's recovery is fuelled by manufacturing and exports, but Kenneth Clarke has handed a package intended to appeal to consumers" Mr McDonagh added.

"Encouraging increased consumption often leads to inflation and that would certainly be bad news for Northern Ireland," he said.

In contrast, the Institute of Directors in the North (IOD) welcomed the budget. "Business needs a steadily growing economy and low inflation rates and this budget is likely to deliver on these points," said Mr Alan McClure, the IOD chairman in the North.

"All in all this is not a budget to bring great joy or despair to Northern Ireland business, but it is a fairly neutral one and should deliver the stability that business wants," he added.

Mr Timothy Quinn, of Deloitte and Touche accountants, said the budget was "safe but unexciting. The most welcome measure was the cut in the standard income tax rate," he said. However, he said the North's economy would be hit more severely than the rest of the UK by increased airport tax, while higher petrol prices would also increase the cost of transport.

Mr Bill Tosh, chairman of the Confederation of British Industry in Northern Ireland, criticised the increases in petrol and diesel which would be a burden on industry and business. It would be more acceptable if it were tied into some improvement in the North's road transport system, he indicated.

These increases would add to business costs with no corresponding improvements in the "congested " roads system, added Mr Tosh.

Northern Ireland charities accused the Chancellor of a "sleight of hand" in the budget. The Northern Ireland Council for Voluntary Action (NICVA) said the budget was a "mirage of tax cuts hiding behind severe public spending cuts".

Mr Quentin Oliver of NICVA, the North's umbrella group for charities, said the budget "masquerades" as a tax-cutting exercise. "But we fear that the sting in the tail will be harsh public spending cuts to follow, especially in Northern Ireland."

Ms Nuala Conlon, of the Northern Ireland Anti-Poverty Network, said the one pence tax cut would not help those on benefits - "the poorest of the poor who do not pay tax".

The Northern Citizens Advice Bureaux in a statement said the budget would bring little comfort for those families already facing a bleak Christmas.

Mr Peter Osborne, the Alliance Party's economy spokesman, said the budget was "not dramatic" and did not tackle the underlying business and community needs.