EFFORTS TO cut Northern Ireland’s corporation tax rates which are strongly supported by Conservative Northern Ireland Secretary of State Owen Paterson are “a huge gamble” and should be opposed, his Labour predecessor has warned.

Speaking in Liverpool on the final day of the British Labour Party’s conference, Shaun Woodward said a reduction to match the Republic of Ireland’s figure “risks making a bad situation worse”, since it would mean a loss of up to £300m in the Treasury’s payments to Northern Ireland.

“Trade unions are against the cut. Unions worried for the tens of thousands in the public sector who will pay for the cut with their jobs in schools and hospitals. Our fear – it heralds a race to the bottom,” he told Labour delegates.

The Secretary of State has argued that a cut to 12.5 per cent would boost private industry and help slowly to rebalance Northern Ireland’s economy, where three-quarters of all activity is currently state-generated.

However, Mr Woodward doubted if the private jobs would come, and if they did they would not go to public sector workers who will have to be made redundant to cope with the cut in Northern Ireland’s block grant from London.

“What happens to them? The dinner lady on the dole? No prospects. The nurse? The lab assistant? The hospital cleaner? The scrap heap. I urge the Secretary of State to think twice before he leaps,” Mr Woodward declared.

The proposal to cut business tax rates has been widely supported in Northern Ireland, though there have been signals in recent times that NI Finance Minister Mr Sammy Wilson would not act quickly even if control on the matter was ceded by London.

Relations between Mr Woodward and his successor-in-office have been poor, with the Labour politician scathing of the decision to deny First Minister Peter Robinson and Deputy First Minister Martin McGuinness direct access to British Prime Minister David Cameron.

Both Mr Robinson and Mr McGuinness are “working hard” to attract foreign investment: “But their hard work is savaged by Coalition policy – not so much a helping hand as a succession of closed doors. And it really doesn’t help that the Secretary of State believes it a badge of honour to deny the First Minister and Deputy First Minister access to the door of Number 10. It doesn’t make him stronger. And it certainly leaves Northern Ireland weaker,” he said.