Page last updated at 14:15 GMT, Wednesday, 9 December 2009

Chancellor Alistair Darling unveils pre-budget report

 Alistair Darling sits at his desk with a copy of his Pre-Budget Report
Alistair Darling has delivered his pre-Budget report

Northern Ireland is to get an extra £28m following the chancellor's pre-budget report.

Around £8m is to be given to Stormont departments while the rest is central government spending on areas like unemployment and child benefit.

It not yet clear how Northern Ireland will be affected by wider government efficiency savings.

Finance Minister Sammy Wilson has said they could mean cuts of up to £100m in Northern Ireland's bloc grant.

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.

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.

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.

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 GMT


Cutting

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.

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.

"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."



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SEE ALSO
Darling raises National Insurance
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'NI recession is over' says bank
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370m funding cuts 'by Christmas'
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