Debate contribution: Autumn Statement 2024: Impact

Debate contribution by Ms Diane Forsythe on 8 April 2025.

MLA

Ms Diane Forsythe

Party at the time

Democratic Unionist Party

Date

8 April 2025

Type

Debate contribution

Business

Committee Business

Heading

Autumn Statement 2024: Impact

Assembly identifier

Official Report component 4919814

Read the official Assembly record

Text

In the absence of Matthew O'Toole, the Chair of the Committee for Finance, who is on paternity leave, I will propose the motion on behalf of the Committee for Finance and the Committee for the Economy. The Chair of the Committee for the Economy, Philip Brett, will make a winding-up speech on the debate. I thank the Business Committee for scheduling the debate and the Minister of Finance for agreeing to respond to it. On 30 October 2024, the Chancellor of the Exchequer announced significant increases in spending to be financed by a combination of tax rises and higher borrowing. While there were a number of announcements on the spending review and increased UK Government spending, there were also a number of proposed UK-wide tax increases, including an increase in employer National Insurance contributions as well as increases in the national minimum wage and the national living wage. Following its meeting on 27 November 2024, the Committee for Finance agreed to host a joint event with the Committee for the Economy to engage with stakeholder groups, across businesses, the community and voluntary sector and social enterprises, to consider the impact of the changes as well as to discuss rates relief and rates reform. The event was held at the Northern Ireland Council for Voluntary Action (NICVA) headquarters and attended by 36 stakeholder groups. On behalf of both Committees, I put on record our thanks to all the stakeholder groups that participated in the event — their input was greatly appreciated — and to NICVA for hosting and contributing. I also thank both Committee teams for organising and setting up the event. The round-table discussion considered three topic areas: the rise in employers' National Insurance contributions; the increases in the national living wage and the national minimum wage; and rates relief and reform. The session provided an opportunity for members from both Committees to hear concerns directly from stakeholders regarding the impact of the autumn Budget. The collaborative approach taken by the two Committees underscores members' commitment to ensuring that the voices of stakeholders are heard. The Committees and stakeholders welcomed the increases in the national living wage and the national minimum wage as positive. However, the lack of notice and consultation on the increases, combined with the rise in employers' National Insurance contributions at the same time, has created a much more difficult situation for businesses and voluntary and community sector organisations. Phasing in the changes or greater consultation and support would have eased that very difficult situation. The impact of the changes follows on from rising costs due to the effects of the COVID pandemic and wider rises in the cost of living, which have already made it harder for businesses to invest and expand. The Committees heard from stakeholders about the direct financial burden on employers due to the increase in their National Insurance contributions. They feel that the burden of filling gaps in the UK Government's finances is being placed on them without proper consideration of the impact. The stakeholders advised that the increase would be significant for businesses, particularly labour-intensive sectors such as hospitality, retail and care. It may limit growth potential and will increase the financial pressures facing businesses and the community and voluntary sector, potentially leading to job losses and reduced investment. The stakeholders acknowledged that the National Insurance cost relief threshold has been increased from £5,000 to £10,000, providing some support for small businesses. They said, however, that that does not significantly offset the broader impact of the other sudden increases in costs, with Northern Ireland having a higher density of small and microbusinesses compared with other regions. The Committees were told that higher costs for businesses will, in most cases, lead to higher prices for consumers, thereby reducing discretionary spending and weakening consumer confidence. It was pointed out that businesses in border areas are already seeing customers shift spending to the Republic of Ireland, further impacting on the economy in Northern Ireland. For some businesses, Christmas 2024 was their last. Flat funding for the community and voluntary sector and more than 10 single-year Budgets mean that those organisations cannot easily absorb additional unexpected costs, which has led to reduced services, job losses and, in some cases, closure. Protective notices have already been issued to staff. On the issue of business rate relief and rates reform, the stakeholders presented a comprehensive assessment of Northern Ireland's business rate system, highlighting key concerns about fairness, transparency and the broader impact on business sustainability. Stakeholders told us that the current rating system is not fit for purpose. Examples such as higher rate poundages in Northern Ireland compared with in parts of England, including Oxford Street, were cited as evidence of there being systemic issues. The cumulative impact of sudden employers' National Insurance increases and wage increases, coupled with rising rates and other cost increases, was described as being a "perfect storm" for many stakeholders. Stakeholders highlighted previous setbacks, including COVID and the resulting supply-side issues and higher costs, describing the autumn Budget as the "final blow" for struggling businesses. Although increasing the national living wage and the minimum wage is always to be welcomed and will deliver some economic benefits, businesses, social enterprises and the community and voluntary sector will struggle to cope with the unexpected nature of the rise when combined with tax increases and other rising costs. Those tax increases, coupled with higher borrowing costs, have the ability to discourage growth increases in employment and investment. The lack of planning and consultation that is associated with the cost increases, as well as an inability to plan and manage the increases with the knowledge of funding that multi-annual Budgets bring, has exacerbated their impact, leading to concerns about business closures, job losses and weakened consumer confidence. Both Committees agreed that the impacts of the changes were so significant that it was necessary to hear from stakeholders at a dedicated event, rather than through Committee evidence sessions. An event offered the scope to hear many more voices and allowed Committee members to engage more freely in order to get a clear understanding of the views of the stakeholder groups. The report on the event has allowed us to share the issues with other Members and to have today's debate so that the issues may be aired and so that we can hear the Minister of Finance's perspective on behalf of the Executive. The Finance Committee has engaged closely with him on UK Government support to mitigate the impact of the changes on the public sector. Unfortunately, as Members will be aware from the Minister's recent statements on the 2025-26 Budget, the UK Government will provide only £146 million of the £200 million that is needed for the core Northern Ireland Civil Service (NICS) to fund the rise in employers' National Insurance contributions. That sum does not encompass the wider public sector, including doctors and dentists. It does not even include the needs of councils or of organisations in the community and voluntary and sector that provide public services. Members will be aware that the Minister's predecessor started a rolling process of reviewing the rates system. That is not likely to deliver change in the immediate future, however. This debate provides an opportunity to hear the Minister's perspective, on behalf of the Executive, on the impacts of those issues and any strategic response that there is to them. Having spoken as the Deputy Chair of the Finance Committee, I will now make a few remarks as a DUP MLA. As I have said in the Chamber previously, and I will repeat today, the Labour Budget has caused increased anxiety for many of our small business owners and their staff, who make our high streets and town centres thrive, provide essential services to the most vulnerable and are at the cutting edge of manufacturing and food production in our communities. Once again, it is worth highlighting the fact that the increase to employers' National Insurance contributions is making our public services feel the pain, and right at their heart. Today's joint statement from dentists, GPs and community pharmacists once again describes the significant impact that the increase has on them. The community and voluntary sector provides a critical lifeline to so many people who face barriers to seeking support for, for example, their mental health. We are talking about the most vulnerable people in society. Staff and the people whom they serve will be affected by those policies, as the sector cannot easily absorb the additional, unexpected costs. The Government have presided over chaos and sweeping cuts, whether those are directed at our pensioners, WASPI women — women against state pension inequality — disabled people, businesses or family farms. My party calls on the Minister of Finance and the Minister for the Economy to lead a coordinated response across the Executive to help protect businesses, the community and voluntary sector and public services here.

1,486 words. Text as published by the Northern Ireland Assembly.

Assessment

Not flagged

Jev’s structured answers

Assessed 21 October 2026 at 12:21 UTC by jev-1.13.0 (requested as typesafe/jev) under rubric 2026.10-r9, methodology 1.9.

Disagree with this assessment?

Classifications can be challenged. A person reads every challenge, and any change is recorded publicly above with its reason.

Challenge this classification