Page last updated at 14:27 GMT, Wednesday, 28 April 2010 15:27 UK

NI faces cuts 'whoever wins poll'

Will Hutton
Will Hutton was speaking in Belfast

The leading economic commentator Will Hutton has warned that the NI public sector will face cuts irrespective of who wins the election.

But he said it would be unfair for the public sector in NI to suffer more pain than other UK regions.

The local parties have clashed in recent days over spending and economic policy.

The debate was sparked by David Cameron who said the size of the NI public sector was unsustainable.

Mr Hutton was speaking on Wednesday at a conference in Belfast organised by InterTrade Ireland.

He said that in the past 15 years taxes raised in a "bubble economy" in the south east of England had been redistributed to other parts of the UK, including Northern Ireland, through a growth in public sector jobs.

He said the way in which public spending has been distributed to NI, and other less advantaged areas, was to protect those areas from the consequences of industrial decline.

More than halfway through this election campaign, the three largest parties have still given us only a small hint of what they would do
Stephanie Flanders
BBC economics editor

Mr Hutton said that, going on the limited information released by the main UK parties, it appears that a Labour/ Liberal coalition would make more "measured" cuts than a Conservative government.

He said a Conservative government would not immediately seek to reform the Barnett formula, which is used to distribute government funding to NI.

However, he added that the public sector will face a freeze on new recruitment and public sector workers could not expect increases in their incomes.

On Tuesday the Institute for Fiscal Studies (IFS) warned that the UK faces the deepest spending cuts since the late 1970s if the three main parties are to meet their budget commitments.

The years between 2011 and 2015 must see the largest cuts since 1976-80, to the IFS.

Its estimates suggest the Conservatives would need to make the biggest cuts.

Meanwhile a Labour government would see the biggest tax rises, the think tank predicts.

Based on commitments made so far, the Liberal Democrats would need to cut an accumulated £51bn from spending on public services by 2017.



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