Around 60 business and political leaders from across Northern Ireland joined to pressure the UK government to allow Stormont to set its own corporation tax.
Around 60 business and political leaders from across Northern Ireland joined forces yesterday at a rally to raise the pressure on the UK government to allow Stormont to set its own corporation tax.
The measure which enjoys that rarest of things in Northern Ireland, namely genuine cross-party unity from the leaders of the main political parties was the subject of a consultation last March, issued by the Treasury as part of efforts to re-balance Northern Ireland’s economy to reduce its dependence on public sector jobs.
“The people of Northern Ireland want to reduce their dependency on the Exchequer and overdependence on the public expenditure. Our businesses want to be able to create jobs at the same rate as their counterparts on the mainland.
“But due to a range of factors – some historical and geographical, others economic and political – Northern Ireland needs an extra tool in the box to get growth going.
“The battle has been won locally, today with unprecedented groundswell of support from across all parts of our society. Now we need a decision from her majesty’s government, one which if made this summer could boost confidence and start attracting high-quality investment and jobs to the province.
“A lower corporation tax rate will significantly enhance investment, economic growth and jobs – it is the only policy measure capable of transforming the Northern Ireland economy and increasing living standards.”
The gathering took place as Northern Ireland secretary Owen Paterson pledged on Monday that a decision on devolving corporation tax would be made by the summer, just over a year since the end of the consultation.
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In accusing the Treasury of dragging its heels on the issue, an editorial in this Morning’s Belfast Telegraph has left readers in little doubt as to where it stands on the issue, declaring:
Everyone is agreed that Northern Ireland’s economy needs rebalanced. The public sector occupies far too dominant a position, chiefly because the private sector is too small.
The peace process, devolution, and the creation of a power-sharing administration have all contributed to creating a much more positive image of the province abroad. However, turning that image into concrete inward investment is proving to be a painstakingly slow job, with every gain being offset by the loss of existing jobs as the recession continues to bite.
That is why it is important to add to the incentives to entice new investors to Northern Ireland. The significant differential in the corporation tax rate between the Republic and the province greatly disadvantages this part of the island. While it is not a silver bullet to cure all our economic woes, lowering the corporation tax rate here would at least level the playing field across the island and make it easier to woo new companies.
The argument for lower corporation tax has long been won, yet the Treasury continues to drag its heels on the issue. The latest projection is that it will be sometime during the summer before a decision is made on whether or not the Stormont Assembly will be granted this tax-varying power. Against that backdrop, it is very encouraging that politicians and business leaders are combining to bring their case directly to Westminster today.
The importance of top business figures pressing for lower corporation tax cannot be over-estimated. These are hard-headed entrepreneurs who can see the advantage to be gained and if they think it is a good idea, then inward investors are likely to take the same view.
Of course, there are some risks. Initially the block grant will be reduced and the tax take from existing businesses will also fall. But experience in the Republic – albeit in stronger economic times – showed those shortfalls can be more than compensated for by increased investment which will result in increased revenue to the government in the longer-term. Sometimes gambles have to be taken to change the economic game.
The debate takes place as survey data released this week by IntertradeIreland showed low demand had led to 85% of businesses across the island of Ireland to face decline with just 21% of businesses in the north either growing or expanding.