The Northern Ireland Executive will use an additional £223 million (€283m) of funding that it will receive over the next four years following the latest UK Budget to "alleviate" significant pressures on public services, its Finance Minister has promised.

Mervyn Storey said the extra funding would also give the Executive flexibility to allocate more financial resources towards health, skills and education.

The Minister specifically welcomed the UK Chancellor George Osborne’s decision to allocate £4.5 million for a Northern Ireland air ambulance.

George Osborne said today a "thriving Northern Ireland" is crucial to his overall plan to ensure that the British government is providing economic security to everyone across the UK.

Mr Osborne also said that with earnings growing faster in the North than any other part of the UK it is important for the government to “back its strengths to make it fit for the future”.

He believes his eight budget “puts the next generation of Northern Ireland first” with a tax cut of roughly £182 for over 800,000 people by 2017/2018 – as a result of of an increase in the income tax personal allowance and higher rate threshold.

Income tax

In addition around 35,000 people in the North will also be exempted from having to pay income tax altogether while an estimated 14,000 people will no longer have to pay the higher rate of income tax because the threshold will rise to £45,000 by 2017/2018.

He confirmed in his budget speech that Northern Ireland will get new funding of £4.5 million for the launch of a helicopter emergency medical service.

The chancellor also announced that he will extend enhanced capital allowances to the enterprise zone in Coleraine and once again re-iterated his commitment to the devolution of corporation tax in the North.

He set out his intentions in the latest budget to cut the UK’s corporation tax rate to 17 per cent by 2020.

Michael Hall, managing partner EY Northern Ireland, said while this is a positive development for the UK as a whole it means that Northern Ireland’s rate, which is set to fall to 12.5 per cent in April, 2018, will be only 4.5 per cent lower than the UK.

Mr Hall warned: “The NI Assembly will therefore need to continue to actively market Northern Ireland as a competitive location for foreign direct investment and develop and execute a strategic plan taking a targeted sectoral approach, to ensure the Northern Ireland economy can maximise the benefit”.

Sustainable finances

Separately the UK treasury also stressed that the North’s Executive must produce a budget after the May elections which demonstrates “continuing progress towards sustainable finances” to ensure everything is in place for the introduction of the new, lower corporate tax rate in 2018.

Industry bodies representing both small and larger firms in the North in general believe the 2016 UK budget is “pro-business”.

Both the Federation of Small Businesses and the Confederation of British Industry heralded new initiatives -from those designed to support entrepreneurs and the self employed to the reduction in the capital gains tax rate and the freeze on fuel duties - as very welcome.

Ann McGregor, chief executive of Northern Ireland Chamber of Commerce and Industry said: “There are some welcome elements of the budget particularly for small businesses in terms of tax relief and stimulus for investment. As an economy built on SME activity this is to be welcomed.”

While Stephen Kelly, the chief executive of Manufacturing NI said that the reduction in the overall UK rate of corporation tax should make the Northern Ireland rate “more affordable”.

Lobbying

But Mr Kelly added: “Whilst enhanced capital allowances are confirmed for the Coleraine enterprise zone, we hope our Executive and MPs would lobby the chancellor in extending these allowances to the whole of NI and herald massive capital investment in production facilities and equipment and kick start the re-industrialisation of NI and growing GDP and jobs throughout the province.

But Danske Bank’s chief economist Angela McGowan said key issues for the North such as health and further education got “no air time at all” in the latest budget.

“Overall small business, working households and savers were the winners today, but for non-working households and those that are dependent on public services there was not much to celebrate,” she said.