A proposal to lower corporation tax rates in Northern Ireland is worth very serious consideration, British chancellor George Osborne insisted.
On his first visit to Belfast since taking office, Mr Osborne said he had received a very clear message from Stormont leaders that the move would help regenerate the region’s economy. He pledged that a decision would be made in the autumn.
Mr Osborne held talks with First Minister Peter Robinson and Deputy First Minister Martin McGuinness on the issue of devolving the power to set business rates to the power-sharing administration.
All main political parties in Northern Ireland and the business community have championed reducing the rate from 26% to something closer to the 12.5 per cent in the Republic, amid claims that it would generate 4,500 new jobs a year.
The proposal was identified as an option in a Treasury paper on kick-starting the region’s economy which is currently out for public consultation.
The chancellor said he came to Belfast in listening mode. “I wouldn’t be here and we wouldn’t have had a Treasury paper if we didn’t think it was an idea worthy of very, very serious consideration,” he said at Stormont Castle.
Mr Osborne said the Government would consider its final decision once the consultation ends next month.
“I think a reasonable period of time is to consider this over the summer and in the autumn give you our response, and that’s what we intend to do,” he said.
The issue is not straightforward for the Stormont Executive as, while a cut in ness tax may stimulate investment and create jobs, it would also be accompanied by a proportionate reduction in central funding from the Treasury of an estimated £385 million a year.
Unions are opposed to the move, claiming it would take money from frontline public services to line the pockets of big businesses. But the overwhelming political consensus at Stormont supports reducing the rate. Northern Ireland Secretary of State Owen Paterson is also a vocal advocate.
While Scotland has also lobbied for the power, both Mr Osborne and British prime minister David Cameron have stated that Northern Ireland is a special case as it shares a land border with a jurisdiction with substantially lower rates.
After a 45-minute meeting with Mr Robinson and Mr McGuinness, the Chancellor, who was accompanied by Northern Ireland Secretary Owen Paterson, held talks with the leaders of the other main parties at Stormont before visiting the Wright Bus manufacturing firm in Ballymena, Co Antrim.
PA