This document summarizes and critiques a Treasury paper on rebalancing Northern Ireland's economy. It notes that the Treasury proposal focuses on reducing the deficit through austerity measures like public sector cuts and tax reductions, which will disproportionately impact women and increase poverty. Alternatively, rebalancing could mean strengthening other sectors beyond financial services, addressing regional imbalances, and implementing gender and environmental audits. Fiscal devolution could enable more democratic local control but may also create a tax haven; any tax changes should be based on priorities around social conditions and democratic decision-making.

1. Poverty
and
Social
Exclusion
in
the
UK
h7p://www.poverty.ac.uk
m.tomlinson@qub.ac.uk

2. Response
to
Northern
Ireland’s
DraG
Budget:
http://bit.ly/a4XEns
Looked
at
impact
of
Spending
Review
on
living
standards
in
Northern
Ireland
and
especially
the
living
standards
of
those
with
the
lowest
incomes
Highlights:
•
Treasury
disinvestment
in
NI
=
£3.48
billion
by
2014/15
•
Capital
investment
strategy
for
2008-­‐2018
=
shorXall
of
£4.5
billion
•
Loss
of
38,000
jobs,
half
from
public
sector
•
Job
loss
–
dispropor]onate
impact
on
women
•
Job
losses
+
cuts
in
value
of
key
benefits
=
increase
in
poverty
•
Dispropor]onate
impact
on
regions

3. Response
to
Northern
Ireland’s
DraG
Budget:
•
Corpora]on
Tax
reduc]on:
Following
Richard
Murphy’s
report
http://bit.ly/ltl3CB
“poor
use
of
£280million
with
no
certainty
of
significant
job
crea]on”
HM
Treasury
paper
Rebalancing
the
Northern
Ireland
Economy
Core
assump]ons:
•
Deficit
reduc]on
(‘sustainability’)
•
Rebalancing

4. Deficit
reduc]on
(‘sustainability’):
•
Corporate
tax
avoidance
(tackle
this
before
reducing
CT)
•
Financial
regula]on
–
interna]onal,
domes]c
(major
challenges
to
turn
finance
from
specula]ve
gambling
to
socially
useful
ac]vity)
•
Sustainability
–
financial
concept
(Treasury
paper
based
on
outdated
concept
of
‘sustainability’)
•
Alterna]ve
concepts:
social,
environmental

5. Rebalancing:
•
Treasury
version:
public
v
private
(public
bad,
private
good:
reduce
business
taxes
and
private
sector
employment
will
fix
NI
economy)
But
other
types
of
rebalancing:
•
Reduce
size
of
financial
services
sector
•
Sectoral
growth
of
manufacturing,
cultural
industries,
knowledge
economy
(and
role
of
educa]on
+
training
in
this)
•
Regional
dominance
of
S
East
of
England
(enterprise
zones
will
not
fix
regional
imbalances
in
employment
and
investment)
•
Gender
audit/budge]ng
(Where’s
the
equality
proofing?
The
words
‘women’,
‘equality’
do
not
occur
in
the
Treasury
document)
•
Carbon
accoun]ng
(green
economy)
(Growth
accounts
vs
green
accounts
e.g.
Puma
-­‐
http://bit.ly/lUZTSl)

6. Devolu]on
of
fiscal
powers:
A9rac:ons:
•
Beyond
a
poli]cs
of
spending
•
Enabling
budgetary
responsibility
•
Genuine
local
responsibility
(or
Treasury
administered
tax
haven?)
“nothing
less
than
radical
decentralisa:on,
to
reach
every
corner
of
the
country”
(David
Cameron)
Conclusion
If
we
go
down
the
road
of
reducing
CT
rates
we
must
do
so
on
the
basis
of
social
condi]ons
and
rebalancing
the
economy
on
terms
that
are
democra]cally
decided
in
N
Ireland.
(If
this
cannot
be
done,
we
need
other
instruments.)