THE STORMONT Executive should consider “bold” options, including the cutting of subsidies, to counter the recession.
Victor Hewitt, director of the Economic Research Institute, told a specially convened meeting of two Assembly committees that radical departures from established policy should be proposed.
A paper prepared by the institute, Mitigating the Recession: Options for the Northern Ireland Executive, has been given to Assembly members and will be released later this week.
Mr Hewitt said Northern Ireland should prepare for what could be a very damaging and prolonged recession. Changes to the three-year budget and the allied programme for government may need to be considered.
Northern Ireland was unlike the rest of the UK economy, he said, in that there is less reliance on the private sector and on the troubled financial sector. However, the global downturn and the extent of the recession in Britain will cause “collateral damage” in the North.
Ideas including the abolition of free medical prescriptions and free transport for senior citizens should be discussed, he said.
He warned that the threat of a deepening recession would be compounded by water charges, estimated at £400 million, the costs of the devolution of policing and justice, and by the push for £5 billion in savings sought by London.
A reduction in the North’s bloc grant from London could see spending cuts of £170 million.
The local economy was unbalanced with too great a dependence on construction. This was “now being put right in a brutal way”.
Mr Hewitt said long-term unemployment was a particular risk.
The DUP’s Ian Paisley jnr sought to distance himself from some of the ideas and questioned cutting schemes aimed at helping some of the most vulnerable.
Mr Hewitt replied: “With the free transport for the over-60s . . . there will be quite a few under secretaries on £100,000 a year who will be able to get their free bus pass. You may think that’s a good use of public money, I wouldn’t.”