Belfast Telegraph

Thursday 28 August 2014

Bid to lower tax rate 'not totally off the agenda'

The bid to lower corporation tax in Northern Ireland "has not been completely shelved" according to the UK's Minister for Europe.

Supporters of a campaign to lower the rate of corporation tax in Northern Ireland to match that of 12.5% in the Republic of Ireland were dealt a bitter blow in March when the prime minister announced that there would be no decision on devolving tax-setting powers until after the Scottish referendum in 2014.

Campaigners say that dropping the rate would attract inward investment from global firms, create jobs and end Northern Ireland's reliance on the public sector.

Those opposed to the move say that the cost of lowering the rate would be too high, as the Northern Ireland Executive would have to compensate the Treasury by handing back a portion of its annual budget. They also claim that Northern Ireland would become a tax haven.

Mr Lidington said that talks on the issue were continuing. "The issue is not something that has been completely shelved," he said.

"The plans still have a great deal of support, what has to be decided has to be in the best interests of the UK as a whole. The case is still a strong one as no other region has a land border with another country, competing for the same business, with a much lower corporation tax rate.

"No other region has the legacy of the Troubles, which made Northern Ireland more inward looking and more dependent on Government funding than other regions.

There is almost 25% more spending per head in Northern Ireland than the UK average and that dependence can only be lifted by a dynamic and strong private sector."

Mr Lidington also had high praise for Invest Northern Ireland in attracting big businesses to Northern Ireland.

"I think funding bodies like Invest Northern Ireland are very important in terms of marketing and promoting Northern Ireland as a business destination, especially when many people would only have heard of the region for the wrong reasons," he said.

"It's all about spending for maximum effect – it's not about saying 'here' have another shovel full of money' – it's about investing to create jobs and opportunities which might not otherwise have existed, which in turn boosts the economy, and it's also about creating less dependence on public spending."

"Businesses need to get in touch with Invest Northern Ireland, with UKTI, with the Foreign Office, with the Embassies, and say, how do we win business abroad?"

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