Autumn Statement 2014: Securing a stronger economy for Northern Ireland
Autumn Statement 2014 confirms that people and businesses in NI will continue to benefit from the Government’s long term economic plan.
Today’s Autumn Statement recognises the strongly held arguments for devolving corporation tax rate-setting powers to Northern Ireland, and makes clear that the Government is well-disposed to making this change.
Legislation will be introduced in this Parliament, subject to satisfactory progress being made in the current cross-party talks on a range of issues, including the need to agree budgets for 2015-16 and put the Executive’s finances on a sustainable footing.
The Chancellor acknowledges that this could be a powerful tool to help the Executive realise the shared goal of rebalancing the Northern Ireland economy, generating sustainable levels of growth and driving private sector employment.
Autumn Statement 2014 also confirms that people and businesses in Northern Ireland will continue to benefit from the UK Government’s long term economic plan.
The personal allowance will be increased to £10,600 from 2015-16, lifting more people in Northern Ireland out of income tax and putting more of people’s money back into their own pockets.
The Government is also reforming Stamp Duty Land Tax on residential property, which should help home buyers pay less to secure their home. And Air Passenger Duty exemptions will be introduced for under 12s and under 16 year olds over the next 2 years.
As a result of decisions this autumn, the Northern Ireland Executive will receive £76 million in funding to 2015-16 through Barnett consequentials.
The Secretary of State for Northern Ireland, Rt Hon Theresa Villiers MP, said:
I welcome today’s Autumn Statement. The Government’s long-term economic plan has helped secure the fastest growth rate of any major developed economy in the world and delivered more people in work than ever before. Northern Ireland is sharing this growth, with economic activity, exports and employment all increasing.
I strongly welcome the commitment to legislate to devolve corporation tax rate-setting powers to Northern Ireland. This is conditional on progress being made in the current talks, including the Executive demonstrating that they can agree a credible course to get their finances on a sustainable footing.
It has taken a significant effort to get to this point and it is positive news that Northern Ireland could be on the brink of getting these powers. Today’s Autumn Statement has raised the stakes in the cross-party talks and made it even more vital that that the parties do all they can to reach an agreement in the short time we now have. It is vital not to let this opportunity slip away.
Today’s Autumn Statement is clear evidence of the Government’s continuing commitment to rebalance the Northern Ireland economy, while delivering jobs and growth for its people and businesses, along with help with the cost of living. It is essential that we continue to work through our long term economic plan that is securing a better future for our economy, for our country and for hardworking taxpayers.
Key measures in the Autumn Statement:
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Corporation Tax - The Coalition Programme for Government in 2010 said: “We will work to bring Northern Ireland back into the mainstream of UK politics, including producing a government paper examining potential mechanisms for changing the corporation tax rate in Northern Ireland.” Autumn Statement 2014 makes clear that the Government is well-disposed to this change, if the right conditions are met.
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Personal Allowance – Will be increased by £600 to £10,600 from 2015-16. This will lift 12,000 people in Northern Ireland out of income tax altogether and 617,000 people will see an average real terms gain of £94.
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Stamp Duty and Land Tax Reform - The Government will change the calculation of SDLT on purchases of residential property so that rates apply to the portion of the purchase price within each band. The Government will also amend the rates and thresholds. Over 99% of home buyers in NI would have paid less or the same SDLT if the slice structure had been in place in 2013-14.
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Air Passenger Duty – An exemption from economy flight APD from 1 May 2015 for children under-12, and from 1 May 2016 for children under-16, would save a 2 child family in Northern Ireland £26 on the cost of economy short-haul flights (e.g. to Cyprus). For long haul flights which involve a change of plane, the saving will be £142 (APD has already been removed from direct long haul flights from Northern Ireland).