Commenting on Hunt’s announcement, Ross Boyd, founder and director of Belfast-based chartered accountancy, RBCA, said, “Most people would have predicted that Hunt’s priority would be to generate positive headlines for the Conservatives, and he recognised that a big win here was easing the financial burden on households with a freeze on fuel duty, and cuts to National Insurance Contributions (NICs).
“He positioned his budget as a budget for long-term growth and stability – improved public services, more productivity, higher wages, and better living standards. And whilst in theory that would be welcomed, we must question if Hunt’s approach is affordable, and how the cost of these changes will impact on our growth. After all, the current debt burden is the heaviest since the 1960s. A forecast of rapidly reducing inflation seems to underpin his plans.
“A further cut to employee NICs from April might seem helpful to households, generating around £450 extra per year for the average worker in Northern Ireland, but the OBR’s initial forecasts indicate that we won’t be any better off as inflation, whilst falling, remains high. And we must remember the opportunity cost. This is a costly £10 billion investment that not only leaves our state pensions at risk, but also leaves less in the pot to support our access to crumbling public services. We’ll still pay a lot into public services, but will we get any real value for our personal investment?
“The allocation of £6 billion to the NHS, detailed in a landmark public sector productivity plan, paints the picture of efficiency with doctors using AI, paper-free hospitals. I too am a fan of the benefits of technology, but I fear this vision is easier to talk about than it is to deliver.
“By addressing the unfair child benefit charge, it’s clear that Hunt wants to reward ‘the squeezed middle’ and encourage as many people to continue to work as possible – a prerequisite for his plans for improved productivity to come to life. However, here in Northern Ireland where SMEs and owner-managed businesses are the backbone of our economy, businesses are not likely to thank Hunt for today’s measures, and certainly not in a position to create more jobs. Unfortunately, increasing the VAT threshold, and extending the recovery loan scheme, will not be enough to transform the current business climate. Our high corporation tax rate and increasing labour costs from April will continue to pile on the pressure and hold business back, potentially pushing a huge number to the point of insolvency.”
