Dodds Welcomes British Pre-Budget Report

Responding to Alistair Darling's Pre-Budget Report to Parliament, Mr Dodds said: "The measures announced today in the Pre-Budget Report to stimulate growth in the UK economy, and in particular the reduction in VAT, are most welcome.

"In addition, the package of measures targeted at supporting small business will be of benefit to 132,000 firms in Northern Ireland.

"The Chancellor faced a difficult task in balancing the need to kick start the economy against the recognition that the additional borrowing will need to be paid back in the future.

"In terms of capital expenditure we have the opportunity to accelerate up to £86.5 million funding for investment in the local economy over the next two years.

"I have listened in recent weeks to the concerns of the local construction industry. This measure provides the flexibility we need to respond to the needs of local firms currently experiencing difficulties."

The Minister welcomed some of the other measures in the Pre-Budget Report: "I welcome the decision to bring forward to January the increases in Child Benefit and the Basic State Pension.

"This will benefit over 300,000 young families in Northern Ireland and offer additional help to older people just when they need it most."

Looking forward the Minister raised concern at some of the measures to increase the level of resources available to the Government in later years: "Whilst it is almost inevitable that the burden of taxation will have to rise in 2010 and beyond to pay for the measures announced today, I would ask that the Chancellor considers options other than an increase in National Insurance rates from 2011 which will simply act as a disincentive on employers to retain and create jobs and on employees to work.

"I also note that Whitehall departments are being expected to achieve a higher value for money target to release additional resources for public services.

"This is something that will also need to be considered by the Executive."

Summing up the Pre-Budget Report, the Minister highlighted the importance of the financial support measures negotiated with the British Prime Minister last week: "The wider fiscal position set out in the Pre-Budget Report highlights the challenging context in which the additional financial support was negotiated with the Prime Minister last week which means that the Executive will be able to defer the introduction of water charges.

"However, the more constrained financial position also means that there is less scope for the Treasury to provide access in subsequent years to the resources left unspent by Northern Ireland departments this year. Therefore, local departments need to take all possible steps to reduce the level of underspend."

"Although it could be argued that more should have been done by the Chancellor today, the response to the downturn in the global economy needs to be sustainable in the longer term.

"Only time will tell whether the measures announced today will be sufficient to bring the economy out of recession," he concluded.