At the Edge of the VAT Debate
When the Chancellor was on his feet announcing his 2.5% cut in VAT, Stormont MLAs were questioning Arlene Foster about her plans to attract more tourists.
One of our local MPs, the DUP's William McCrea, did get a question in. He wanted to know what the Chancellor proposed to do about "extortionate interest rate premiums that banks are placing on small businesses". The Chancellor said it was important that banks behave reasonably and he was introducing extra scrutiny to ensure that "appropriate action" could be taken if they don't.
The Stormont Finance Minister Nigel Dodds welcomed the VAT cut, but opposed the planned increase in National Insurance contributions. Mr Dodds said the Executive now had the opportunity to "accelerate up to £86.5 million funding for investment in the local economy over the next two years". He hinted that this would enable him to assist the local construction industry,soemthing which we might hear more about at the Executive's meeting next Thursday which is due to concentrate on the "credit crunch".
Whilst Nigel Dodds reckons the package is a bit of a curate's egg ("only time will tell" is his fence sitting conclusion), the Tory NI spokesman Owen Paterson is predictably critical. He says the "tax bombshell" will only make NI's "clearly unsustainable" public sector dominated economy worse.
I haven't yet seen a UUP response, but should we deduce that in this "new political force" era they will repeat the Conservative line?
The Alliance's Stephen Farry has given the Darling package a qualified welcome describing it as decisive. He reckons the Darling approach to the economic downturn contrasts with the "inaction" of the Executive so far. Mr Farry, who spent some time studying in Washington D.C., is also a fan of Barack Obama's planned "Green New Deal".
So far I haven't seen any responses from Sinn Fein or the SDLP, although I'd be surprised if they don't come down on the Keynesian side of the argument.
As the pattern of shopping in border towns shows, price differentials influenced by tax changes and currency movements can have profound implications for us. But with Stormont bereft of tax varying powers you get a sense of being on the sidelines when such statements are made. The UUP-Tory marriage is meant to be one move which might bring local and UK wide politics closer together, but so far as NI and the latest debate is concerned are they on the right side of the argument?
UPDATE: Sir Reg Empey has just told my colleague Gareth Gordon that he would have preferred more help for people paying their fuel bills to a cut in VAT. Mark Durkan says it's not clear if the temporary VAT cut will provide more of a stimulus than a rebate on income tax.
I'm 
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