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NI budget 'could face £100m cut' Darling unveils pre-budget detail
(19 minutes later)
Finance Minister Sammy Wilson has said he is worried that the Northern Ireland bloc grant could be slashed in Alistair Darling's budget cuts. Northern Ireland is to get an extra £28m following the chancellor's pre-budget report.
In his pre-budget report, Mr Darling said the UK economy had shrunk by 4.5% this year, more than he expected. Around £8m is to be given to Stormont departments while the rest is central government spending on areas like unemployment and child benefit.
Mr Wilson said the Chancellor had previously indicated efficiency savings of £3bn. It not yet clear how Northern Ireland will be affected by wider government efficency savings.
On a pro rata basis, Mr Wilson said Northern Ireland would expect a cut of £100m in its bloc grant, Finance Minister Sammy Wilson has said they could mean cuts of up to £100m in Northern Ireland's bloc grant.
"If you are told your bloc grant is going to be reduced by that amount of money then you've got to find it: this will not be negotiable with the Treasury," he said. The chancellor's statement set the tone for the economic debate in the run-up to the election - which must be held by next June.
The Chancellor's statement set the tone for the economic debate in the run-up to the election - which must be held by next June. In his statement to MPs, the chancellor unveiled a 2.5% rise in the state pension from next year and a 0.5% rise in national insurance contributions from April 2011.
In his statement to MPs, the chancellor unveiled a 50% tax on bank bonuses, a boiler scrappage scheme and a 2.5% rise in the state pension from next year. Public sector pay faces a squeeze, with increases restricted to 1% for two years from 2011. That will have a particularly significant impact on Northern Ireland because of its large public sector.
He also detailed what savings are required across Government departments.
WHAT IS THE PRE-BUDGET REPORT? Each year the chancellor delivers two reports to MPs, updating them on the state of the economy and planned fiscal changes.WHAT IS THE PRE-BUDGET REPORT? Each year the chancellor delivers two reports to MPs, updating them on the state of the economy and planned fiscal changes.
The pre-Budget report (PBR) takes place in the autumn with the Budget each spring.The pre-Budget report (PBR) takes place in the autumn with the Budget each spring.
This year's PBR will be Mr Darling's third since he became chancellor in June 2007 and, with an election imminent, his most important.This year's PBR will be Mr Darling's third since he became chancellor in June 2007 and, with an election imminent, his most important.
You can watch BBC TWO's pre-Budget report special - together with text commentary and expert analysis and reaction on the BBC website from 1130 to 1430 GMTYou can watch BBC TWO's pre-Budget report special - together with text commentary and expert analysis and reaction on the BBC website from 1130 to 1430 GMT
Economic challenges for the parties Nick Robinson's viewEconomic challenges for the parties Nick Robinson's view
CuttingCutting
Employment and Learning minister Sir Reg Empey said that demand for the services his department were providing was going up because of rising unemployment.Employment and Learning minister Sir Reg Empey said that demand for the services his department were providing was going up because of rising unemployment.
"If we have to start cutting that will effect the service we can deliver - that's inevitable," he said."If we have to start cutting that will effect the service we can deliver - that's inevitable," he said.
Northern Ireland has traditionally had a larger reliance on the public sector than the rest of the UK.Northern Ireland has traditionally had a larger reliance on the public sector than the rest of the UK.
Alliance Economy spokesman Stephen Farry said that this may prove to be an Achilles' heel for the local economy.Alliance Economy spokesman Stephen Farry said that this may prove to be an Achilles' heel for the local economy.
"Whenever there have been recessions in the past this has been a cushion that has seen us through the difficulties, for example in the early 90s when the UK went through a recession Northern Ireland didn't," he said."Whenever there have been recessions in the past this has been a cushion that has seen us through the difficulties, for example in the early 90s when the UK went through a recession Northern Ireland didn't," he said.
"But this time because we are potentially seeing cuts in public spending to pay off the debt this becomes a very doubled-edged sword.""But this time because we are potentially seeing cuts in public spending to pay off the debt this becomes a very doubled-edged sword."