Northern Ireland budget gets £650m boost from UK

Phillip Hammond promises to give NI executive power to set rate of corporation tax

Britain’s chancellor of the exchequer Phillip Hammond poses with the budget box at 11 Downing Street in London. Photograph: Neil Hall/EPA

Britain’s chancellor of the exchequer Phillip Hammond poses with the budget box at 11 Downing Street in London. Photograph: Neil Hall/EPA


Northern Ireland’s budget is to get a welcome £650 million boost from the UK Treasury but the British chancellor was much more generous to the Scottish and Welsh governments in his latest budget.

Philip Hammond said decisions taken in the budget would mean £2 billion more for the Scottish Government and £1.2 billion more for the Welsh Government.

According to the UK Treasury, the Northern Ireland Executive block grant will increase up to 2020 - which it claims will give the next Northern Ireland Executive “even greater spending power”.

During his budget speech the British chancellor specifically highlighted a number of key measures which he said will directly benefit the North.

“We’ll deliver on our commitment to review the effect of VAT [value added tax] and APD [air passenger duty] on tourism in Northern Ireland, reporting at next year’s Budget.

“And we will open negotiations for a Belfast City Deal as part of our commitment to a comprehensive and ambitious set of city deals across Northern Ireland,” Mr Hammond declared.

A city deal would give Belfast greater control over their public spending budgets and potentially more power to make more widespread economic decisions.

Corporation tax

He also threw a potential lifeline to North’s languishing lower corporation tax ambitions promising to give “the Northern Ireland Executive the power to set the rate of corporation tax, once a restored Executive demonstrates its finances are on a sustainable footing”.

Mr Hammond said: “Subject to this, the government will consider an announcement in 2018-19 on implementing the regime. This will make Northern Ireland more competitive, attracting global business and investment”.

But his decision to freeze air passenger duty for all short-haul passenger flights leaving from Northern Ireland to £13 will, however, be viewed by many as a wasted opportunity to deliver a boost to the North’s growing tourism sector.

Although, the chancellor did also pledge to publish “a call for evidence” early next year to consider the impact of VAT and air passenger duty on tourism in Northern Ireland, to report at Budget 2018.

The North will also benefit from wider measures set out in Mr Hammond’s second budget including a freeze on fuel duty which could save the average driver in Northern Ireland nearly £9 every time they fill up their car.

Some workers could also benefit from a potential £600 pay-rise when the UK’s National Living Wage goes up next April to £7.83.

An increase in the UK personal allowance - the amount you can earn before you start paying income tax - could also benefit more than 745,000 people in Northern Ireland who will have gained by an average of £182.