McDonnell: Achieving a tough but fair Budget is not beyond us

Yesterday the Finance Minister, Simon Hamilton proposed his draft budget. Writing for Slugger the Leader of the SDLP, Alasdair McDonnell MP, argues that a tough budget need not be an unfair budget

This draft budget is a bad budget – one that puts political expediency above the needs of the people that it is supposed to serve. The trouble began with the DUP’s unilateral negotiation and Sinn Féin’s unilateral acceptance of a 100m loan from the Treasury. The SDLP opposed this at the time with our Minister at the Executive Mark H Durkan calling it a ‘ridiculous and irresponsible’ attempt to patch up an escalating budget. Unfortunately the SDLP were proved right because one of the conditions of the loan was that the Executive agree a draft Budget by the end of October. In a bid to meet the Treasury demands the Minister for Finance rushed through a draft budget with mere hours of consultation with Executive colleagues about the devastating cuts that were about to be imposed.

It is impossible to know what is more disappointing. A Finance Minister who at the behest of the Treasury ignored process and best practice to force this draft Budget through or the complete u-turn from Sinn Féin who not only capitulated to dogmatic Tory cuts but now appear to be dismissing the public consultation process by saying that this is the best deal that can be done.

We should never have been in this position. The SDLP voted against the Budget originally in 2011 because we knew that setting a budget for four years would not allow the Executive to respond and adapt to any changing economic circumstances. Not only did the Minister for Finance not take decisive action in the face of a looming economic crisis, he rushed through a Budget with no proper explanation of baselines, allocations or consideration for coming years. Not only was this budget not open or transparent, it is not strategic. A Budget for 2015-16 in isolation from anticipating the following years is not fiscally sound.

But the real reason that the SDLP Budget opposed this budget is that it is bad for jobs and workers, particularly those who live in the west. Let no one be of in any doubt. This is an anti-worker budget. Pay freezes and redundancies and impacts to jobs and services will hit the lowest paid hardest. Those families who are already struggling will now face even greater hardship.  This draft Budget enshrines regional imbalance. DETI is the only Department to get an increase in funding. You might think that this is a welcome move as DETI helps to attract investment and increase jobs. Yet experience has taught us that DETI focus investment in the East increasing the disadvantage in the west. If the Finance Minister were properly focused on job creation then further support should have been given to SMEs who are the biggest employer in the private sector. Yet this Budget will have a particular impact on SMEs and local regional jobs with cuts in the Department of the Environment affecting funding for de-rating and other Council grants that would support job creation. This Budget will also adversely affect those councils most in need of financial support – they will not be able to deliver services comparable with better off council areas.

While the SDLP opposed this Budget we felt it was vital that it was put out to consultation. Today in the Assembly, Alban Maginness MLA asked Minister Hamilton why the consultation period had been shortened saying that people needed to see how savage the cuts actually are. People need to examine the detail to see the impact on their jobs and services for themselves.

The SDLP know all about the Budget pressures. We acknowledge the gravity of the financial situation we are in, even if we do not accept that getting here was inevitable. There are some positives in this Budget that we would like to see expanded upon including measures that the SDLP recommended in previous policy papers including proposals how Ministers deal with the budget processes and the use of zero-based budgeting; further investment in infrastructure by the leveraging of additional funding and further asset sales to raise much needed revenue. Central to this Budget, despite cuts, must be equity for lower paid workers and for the regions.

Achieving a tough but fair Budget is not beyond us. The SDLP will not walk away from that challenge. We believe that a better deal can be secured as part of the Talks process which is where the Budget should have been dealt with in greater detail.

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  • chrisjones2

    “one of the conditions of the loan was that the Executive agree a draft Budget by the end of October.”

    That’s truly shocking that they should set a budget

    “bad for jobs and workers”

    ….especially in the public sector who vote SDLP

    ” particularly those who live in the west.”

    …especially those who might vote SDLP

    “Pay freezes and redundancies”

    ….especially to those in the bloated public sector who vote SDLP

    Still its nioce to see the Stoiops take a position – even if its a foolish one

  • Gopher

    Show me the money Alasdair. Usual waffle from a non entity followed by the usual “The SDLP will not walk away” in other words they will continue to take the cheques for being part of the executive and not take the pricincipled stand of going into opposition.

    The upcoming “Talks” process is going to negotiate the SDLP out of existence Alasdair, 5 seat constituencies and the two biggest parties solely in government the SDLP wont be walking away they are going to be thrown out of the house. You think anyone is going to listen to the SDLP at those talks?

  • Ian James Parsley

    If “achieving a tough but fair budget” isn’t beyond us, could Alasdair explain what precisely he would do differently?

    I would introduce water charges gradually, raise the Regional Rate by about 5%, remove the Rate Cap, and lift the age for free public transport to 65. I would use that money primarily not to cut the DEL and DRD Budgets.

    There’re my tough choices. Where precisely are the SDLP’s?

  • Gopher

    Old people will simply stop using public transport. Trains and buses are running around empty outside the rush hour. Free Public transport for pensioners costs absolutely nothing and keeps trafficof the roads. Towns outside the greater Belfast area will suffer because pensioners will stop going on day trips and spending money there. If you want to start charging pensioners, cut services rather than having buses and trains empty from 9am until the schools get out or better still privatize the useless cash drain.

  • Looking forward to the publication of what the SDLP thinks would be a ‘good’ budget. Or perhaps the link to that on the SDLP website could be included somewhere in the article. Or is that too much of a challenge?

  • Zeno3

    So basically more taxation Ian.

    What about instead of inventing new taxes, like water charges the politicians looked at how they actually spend and waste a lot of the Tax income?

    Lets look at things like the £168 million spent upgrading sports stadiums while closing hospital beds to save money. The £12 million wasted on the Police Training centre at Cookstown. The millions spent on the non existent Peace Centre? I’m a sure a detailed examination would reveal 100’s of millions more tossed away.

    http://i.imgur.com/JYAVWj7.gif

    Lets look at reducing the 400 staff employed at OFMDFM, the number of MLA’s , Councillors

  • Michael-Henry Mcivor

    Alasdair McDonnell talks about the draft budget -( which got 100 million )- and a budget -( which has to be approved or disapproved in seven weeks time )-like they are the same- Alasdair should know about the vote in December because he is still a MLA as well as a MP whilst he has helped to ban the rest of the party from doing the same-( and not one SDLP member has the guts to speak out about their two faced leader )-

    The SDLP could have approved the draft budget -( then when their Minister asks for a slice do the 100 million he would not be thought of as a oaf )- and voted against the actual budget in December-( but it’s a bit late for SDLP ideas )- there has to be at least one member who would show the vision to speak out against two Political wages McDonnell- just one –

  • Ian James Parsley

    I agree with you. But try taking that to the electorate, most of whom depend on public sector (or at least public-funded) jobs! I know, I tried!

    So I think you’re more likely to see public pressure on that sort of thing if we are contributing more. Remember, even with my proposals, taxation in NI would remain by far the lowest in the UK.

    Remember also, the SDLP has pledged to protect *every single public sector job*. More fantasy finance.

  • Ian James Parsley

    Old people?

    Read again – “raise from 60 to 65”.

    Firstly, we (rate/taxpayers) actually *pay* Translink for the smart cards out of the DRD Budget (that’s actually what happens).

    Secondly, I don’t see why I should pay for a senior civil servant to commute for free.

  • mickfealty

    That’s widely held perception Goph, of the “sure isn’t water free” type. Like the victimless crime, the costless public service does not exist.

  • Zeno3

    I think you have misunderstood me. I’m saying no more taxes, no more job cuts, stop wasting the money.

  • Ian James Parsley

    But that’s not an option.

    60% of public spending is on salaries. To reduce public spending to make ends meet, you will have to cut salaries – either by reducing the salaries themselves (good luck with that) or by job cuts.

    The fact is the public sector employs too many people in NI. If it didn’t, we could consider no revenue raising measures. But for long as it does, we’ll have to pay for them!

  • Ian James Parsley

    When I studied in Germany I paid a few hundred marks for a Student Card, but that entitled me to free public transport. Thought that was interesting…

  • Bryan Magee

    Raise university tuition fees, and increase the free transport age to 67. Have water charges, privatize water and Belfast port, and have charges for prescriptions for those who are not poor.

  • Bryan Magee

    The trains don’t seem empty to me-they seem well used right up to 9pm and there is peak pricing now before 9.30 to encourage people to use the later times. The free travel in particular should be discouraged at the peak morning commuting times when there is standing room only.

  • Zeno3

    See my comment on the Public sector in the other thread.

    Cutting wages or jobs will only damage the economy if you know anything about economics.

  • Comrade Stalin

    It’s all very well to complain about the problem. It takes a statesman to propose a solution, and Alasdair has pointedly failed to do that.

    Back in the day the Labour Party used to produce a Shadow Budget to show the public what they would do if they were in power instead of the Tories. Sinn Féin have produced at least one shadow budget proposing how they would approach revenue raising and public spending in the RoI. So – what would the SDLP do differently ?

    Come on guys. Any idiot can bring problems to the table. We pay you to come up with the solutions. Not wring your hands about how bad it all is.

  • Comrade Stalin

    I know a little about economics.

    Cutting wages/jobs does not necessarily damage the economy. If we, say, cut the salary paid to GPs by 10% (down from the ridiculously generous allowance the BMA extracted from Labour), we could employ another load of GPs without spending any more money, which would get waiting times down and cure more sick people.

    Reducing the size of the public sector may well improve the economy, especially if the public sector is paying people to do nothing who could otherwise be more usefully deployed elsewhere.

  • Comrade Stalin

    or indeed, pay for civil servants, doctors and others to take free day trips to Dublin on the Enterprise.

  • Comrade Stalin

    “stop wasting money” = implement spending cuts. Where do you propose to cut ?

  • Gopher

    Senior civil servants wont commute for free they will continue to drive like they do now. Thats the fact of the matter.

    Money well spent as it frees the road for comercial traffic and the millions wasted on the Belfast city centre redesign for buses will look pretty stupid with empty buses running around from 9am to 3pm. Take into account the cost of parking in Belfast and you might aswell close the rest of the shops in the city centre if you get rid or tamper with free bus passes. Not to mention the damage done to the pubs as lunch and an afternoon tipple will taken off the menu. Alliance seem to be really going for the Taxi vote lately. Smart move, big demographic everyone who is laid off now or needs a second job to cover the morgage becomes a taxi driver.

  • Gopher

    People wont stop using water because you have to pay for it, but pensioners will stop using public transport, the services will continue empty, burning fuel, paying wages, and no one will benefit not the motorist, not the tax payer, not the publican, not the shop keeper. Two completely differing public services.

  • Any sign of a copy of the ‘good’ alternative budget? Waiting…