IT has been widely billed as a the toughest Budget in a generation.
Chief Minister Allan Bell MHK has already warned that ‘extremely painful and unpopular decisions’ will have to be made as the government battles to rebalance its finances – and that we were ‘probably going to be losing services that many of us grew up with and loved for many years’.
Last week’s confirmation by the Department of Education that it is to close 11 nurseries, Bride School, the Family Library and the Mobile Library was proof of that.
So what other measures could there be in Eddie Teare’s first Budget – taking place on Shrove Tuesday – as Treasury Minister?
Mr Bell has already signalled that tax rates will not change.
But allowances and reliefs could still be adjusted. It is likely that income tax personal allowances will be frozen at current levels – but mortgage interest relief is one area that is likely to be cut further.
Universal benefits are also likely to come under the spotlight. A review has already been launched, but it may be that some new measures, perhaps in relation to levels of Child Benefit for more than one child, could be announced on Budget Day.
Given the level of concern at rising unemployment among the young, it is likely that Mr Teare will outline measures to tackle so-called NEETS, those not in education, employment or training.
These could be incentives to encourage employers to take on more trainees and changes to the benefits system ensure that being on the dole is not a lifestyle choice that pays more than going to work.
Aside from last week’s announcement of nursery and library closures, we are unlikely to see further headline-grabbing cuts to services unveiled by Mr Teare.
Indeed it will be for the departments to decide how they deal with their individual budgets, although any controversial measures will have been flagged up with the Council of Ministers.
Most departments are likely to see reduced budgets and the implications of this are due to be unveiled by each department later on Budget Day.
Given repeated messages that we are all supposed to be in this together, it is expected that the super-rich will not go untouched by the Budget, and so it is likely that the tax cap will be raised. The tax cap is currently £115,000 per individual taxpayer.
We could also say that the government is likely to call on its reserves over the next three to four years to ease the rebalancing of public finances in the wake of the loss of a third of its income following revision of our VAT deal with the UK.
