Tax and cut now or later? British and Irish contrasts, as NI edges out of recession

Let’s cover the local angle first – somebody has to. The Northern Ireland MSM’s sparse coverage on line of the implications of both Budget statements suggests that money talk is beyond their ken and that of their audiences. This is a bad mistake and lazy journalism. So it’s thanks to Henry in the Guardian for making the obvious phone calls and passing on the Northern Bank’s assessment that for NI the recession is over – thanks to southern shopping. We can expect a Christmas border boom but will it survive the rise in UK Vat in January? The Indy thought so in a piece last night, given the low pound and rock bottom booze pricing. But this has since been replaced on its website by a more optimistic message from Irish booze sellers. At Stormont, Sammy, who these days seems more subdued under the weight of the finance portfolio is grateful that the axe hasn’t fallen on devolution spending – yet he got no joy out of Darling for post- 2011. We now desperately need an assessment of the scene after both Budgets for the whole island and the north-south implications. On the bigger picture, the Torygraph in austere mode praises Irish realism in dealing with a similar crisis very differently from the UK. In a Telegraph blog, right wing Europhobe MEP Daniel Hannan offers condescending praise to the Dublin government at London’s expense.

I have been disobliging about Biffo Cowen in the past, but the fellow is at least trying to do the right thing..

Reading the eye-watering list of key cuts and taxes in the Irish budget ( see below), I marvel at the news of TDs trooping obediently through the lobby this morning to approve it all in a rush. Will the Unions come to heel? Living the Budget presents a huge test for Irish society. I really doubt if a British government could survive such an onslaught. Can the Irish system hold up? Perhaps. Even after the Budget, Irish welfare scales remain up to a third higher than the UK’s, Stephen Collins in a sober assessment believes that may blunt the impact of the inevitable protest. But it’s a mighty swallow in one lump. Brendan Keenan cautiously endorses Brian Lenihan’s belief that it’s better now than later to do the heavy lifting. But then, he’s not the finance minister certain to face an election in six months.KEY CUTS €16

Child benefit cut by 10 per cent to €150 a month.

€8

Unemployment benefit cut by 4.1% – to under €200.

5-8%

Public sector workers on salaries of up to €125,000 will have wages cut by between 5-8 per cent. Workers on salaries of up to €200,000 face further cuts of between 8-15 per cent

€8.20

Weekly carer’s benefit

50 cent charge on every item on prescription

KEY TAXES

4.9 cent

Carbon tax – diesel up 4.9 cent a litre and petrol up 4.2 cent

€200,000

Domicile levy on all Irish nationals whose income exceeds €1m

Former BBC journalist and manager in Belfast, Manchester and London, Editor Spolight; Political Editor BBC NI; Current Affairs Commissioning editor BBC Radio 4; Editor Political and Parliamentary Programmes, BBC Westminster; former London Editor Belfast Telegraph. Hon Senior Research Fellow, The Constitution Unit, Univ Coll. London

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