Cuts could result in 50,000 jobs lost in North
Published 21/10/2010 | 09:17
Northern Ireland political leaders were on a collision course with the British government accusing it of reneging on financial commitments and endangering thousands of jobs in the region.
They claimed the cuts unveiled by English Chancellor George Osborne amounted to a £4 billion loss for the Stormont purse over the next four years, sparking predictions of 50,000 job losses.
First Minister Peter Robinson and deputy First Minister Martin McGuinness, who are returning from a US investment conference, said the cuts were worse than they feared and breached existing agreements.
But their criticisms brought a swift response from Secretary of State Owen Paterson who said the British government had fulfilled all its commitments and had reached a fair settlement with the Stormont administration, which local politicians must now allocate as they see fit.
Mr McGuinness claimed the coalition appeared to have reneged on an £18 billion investment pledge made by the British government in the 2006 St Andrews political deal that established the power-sharing administration at Stormont.
"I am very angry," he said. "I am going to hold my counsel on this until we have a full picture, but the initial reaction is one of great anger to the fact that it appears, at this stage, that Owen Paterson, who went on the record as saying they would honour the £18 billion commitment, appears to be far from honouring that position as we stand here today."
Mr Robinson said a 40.1% cut to the budget for infrastructural projects would stagnate the regional economy.
"I think there are two breaches of undertakings that we were given. Clearly there had been smoke and mirrors in relation to the £18 billion... on top of that, the Prime Minister had endorsed the Policing and Justice package, and we have very real concerns that there is a breach of an undertaking that was given in that area as well."
He told the BBC he feared the British government may fail to fulfil agreements made earlier this year in relation to the devolution of policing and justice powers to the Stormont Assembly.
But Mr Paterson said he had spoken to Mr McGuinness and Mr Robinson by telephone and he claimed they had failed to raise any concerns.
He claimed the Government commitment to invest £18 billion in infrastructure projects was on track for completion by 2017/18, which he said matched the timetable drawn-up by the previous Labour government.
The Secretary of State also said his government would meet its pledge on security budgets as Northern Ireland faced the continued threat from dissident republican groups.
On both counts he said: "That is built into the settlement."
While Westminster departments faced an average 19% cut, he said the departments in Northern Ireland faced a cut of 6.9% over the four-year period.
Mr Paterson also said the Chancellor's pledge of a £200 million rescue plan for the stricken savers of the Presbyterian Mutual Society (PMS) should not be underestimated.
He claimed Labour had dropped the issue on its watch, and added: "From nothing, absolutely zero, we have now delivered exactly what the Executive wanted."
Northern Ireland finance minister Sammy Wilson urged Stormont politicians to pull together to cope with the cuts.
"The fact is that we now know the actual outcome, we have a duty to take those difficult decisions," he said.
But Sinn Fein finance spokesperson Mitchel McLaughlin said: "The projected cuts are savage - there is no other word to use.
"They signal only disastrous consequences for the economy in general and the most disadvantaged in particular."
He predicted 20,000 job losses in the public sector and the same figure in the private sector.
"And remember, since May 2008 the unemployment figure has risen by 35,000. We are therefore facing into the prospect of up to and over 100,000 unemployed."
Union leaders in Northern Ireland also attacked the cuts.
Patricia McKeown of the public sector trade union Unison claimed the cuts would cost 12,000 private sector jobs and 36,000 public sector posts.
"This will push the NI economy over the edge," she said.
Shadow Northern Ireland secretary Shaun Woodward said: "Clearly, Northern Ireland's political leaders are tonight worried that the British government has broken promises.
"The Secretary of State should answer urgently the very real worries which people tonight have about the impact of the spending review in Northern Ireland, both on the political process and the stability of Northern Ireland."
He added: "The Secretary of State should urgently reassure people that his Government's review will not lead to a loss of police numbers on the streets.
"What will be the impact on community policing? What will be the impact on the budget to meet security in Northern Ireland? Has the security budget been fully ringfenced?
"The Coalition Government should never take risks with the stability of Northern Ireland and must honour all of the funding commitments made most recently in the Hillsborough Castle Agreement."