Mr speaker
I understand that the debate this afternoon is really a matter of procedure.
We are already well into the current year and the budget is being used by the various departments.
We can all rehearse arguments to further our favourite interests but that is really a waste of time today.
However it is useful to set this budget in the context of the forthcoming Comprehensive Spending Review which will apply for the next three years.
We already know that the CSR will be tight for both the UK as a whole and Northern Ireland in particular.
In the first Assembly the background was quite different from today. There were annual rates of growth in public spending in the region of 3% in real terms – that is after allowing for inflation. We may now be facing significantly lower rates than this – maybe 1% in real terms at best.
The spending in Northern Ireland per head of population is 28% above the UK average.
Public spending (as a percentage of regional GDP) in 2004/05 was
Ø 66% for Northern Ireland
Ø 51% for Scotland
Ø 49% for Wales
Ø 41% United Kingdom Average
Public sector employment as a percentage of total employment in 2005 was
Ø Northern Ireland 30%
Ø Scotland 24%
Ø Wales 23%
Ø UK average 20%
We have much catching up to do!
Next year we will hopefully have more scope to change our budget but today we can only accept the figures set under direct rule.
At the end of the summer we will be engaging in the budget preparations for 2008-09.
The budgets should arise from the Programme for Government and have a limited number of over-arching priorities which would guide Departmental-spending plans.
We need to ensure that the process adopted will allow for accountability through the various committees.
The establishment of priorities is crucial given that financial resources are limited.
We need to be realistic and allow for investment to promote growth for the future. Innovation and human capital should be priorities.
It is not acceptable that the Regional Economic Strategy will change from 80% (of UK average) to 80.5% by 2015.
We need to create real growth.
Some people including the Secretary of State have pointed to the fact that Northern Ireland needs £5 - £6Billion subsidy from H M Treasury. Surely it is normal for “richer” regions within the national fiscal and monetary union to transfer to poor parts of the Kingdom. Wales (including Mr Hains Neath Constituency) and Scotland also have considerable subsidies.
It is curious and unimaginative of the Treasury to propose that the way to cut this subsidy is to raise taxation here (for example the Rating Reform).
Surely the way forward is to reduce the burden of taxation (particularly on business - in rating, corporation tax and fuel duty) and so increase economic activity and hence revenue.
Finally I would like to refer to the Economic Package
– The empty economic package.
Others have made much play on their negotiating skills – well in this test case they have failed miserably!
There is little in the package in terms of real growth in the level of spending.
In terms of details the Executive is being allowed to do what it would have been able to do anyway –
Ø Efficiency savings
Ø Asset sales
Ø Year end flexibility
Mr speaker we need to have an adequate economic package to allow this Assembly to take Northern Ireland forward on a sustainable basis and not be handicapped from the outset.