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Good morning John

Next Wednesday (22nd November) the Chancellor is scheduled to deliver the Autumn Statement.

Whilst the details of the Statement are a tightly guarded secret until he stands in the House of Commons, there has been speculation about tax breaks on Inheritance Tax and Stamp Duty.

From a Northern Ireland perspective, the DUP Parliamentary Party has been pressing the Chancellor for measures which would help working families.

The Tax-Free Childcare allowance is designed to give working families a 20% discount on their childcare costs. We have long argued with the Treasury that this 20% rate is too low. By increasing the Tax-Free Childcare allowance, many parents, mainly women, could afford to return to work.

It is an established fact that a childcare bill often dwarfs the cost of a mortgage. Indeed in homes with more than one child, the cost of day-care neutralises any income derived from returning to work in some of our public services. Therefore many parents opt to exit the workforce which leaves gaps in our health service, schools, police service and industries.

We have also been pressing the Chancellor to give working families a break on green taxes which are being levied on almost every aspect of our lives at a time when families are facing growing mortgage bills. People living in Northern Ireland depend on road haulage for their goods and on their cars to get to work, yet almost 50% of the cost of a litre of diesel or petrol is taxation.

Whilst people flying within the United Kingdom from the Scottish islands are exempt from Air Passenger Duty, Northern Ireland fliers are not. For the construction company sending 15 or 20 workers to GB every week, this all adds up but it also massively undermines our airports’ ability to compete with airports in the Republic of Ireland.

Northern Ireland currently has a budget shortfall of half a billion pounds, yet if this Autumn Statement produces any additional funds for the devolved regions, Northern Ireland will not get anything until we first pay down the budget shortfall from last year.

This is not a sustainable position. The DUP has led the way in making the case established by the Fiscal Council that Northern Ireland is funded below its level of need. The Treasury contribution to fund public services in Northern Ireland is diminishing rather than rising. As an example, in England up to 2025, spending will increase by 6% but only 3.6% in Northern Ireland.

The U.K. Government have defined how “need” should be measured and the NI Fiscal Council has consistently found that NI’s funding envelope falls short of meeting our “need”. Wales found this problem more than a decade ago and it has now been resolved. The same mechanism can be used to resolve the issue in Northern Ireland.

Unless there is a recalibration of how Northern Ireland is funded, the situation will only get worse.

We will keep you updated on our response to the Chancellor’s statement on Wednesday.

Thank you,

Sir Jeffrey Donaldson MP
DUP Leader
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