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CBI boss Nigel Smyth warns against delays to corporation tax cut as Sinn Fein is accused of backsliding on previous agreement

By Noel McAdam and John Mulgrew

Published 23/04/2016

CBI director Nigel Smyth
CBI director Nigel Smyth

A senior business leader has warned against any uncertainty over Corporation Tax because big investment opportunities could go outside Northern Ireland.

CBI director Nigel Smyth said it was essential the detail of devolving a lower rate for NI is built into the next Assembly's Budget over the summer.

His comments came as Ulster Unionists and the Conservatives combined to call into question Sinn Fein's commitment to the devolution of Corporation Tax.

The two parties accused SF of backsliding and attempting to dupe the public.

Their twin attack came after apparent differences between Deputy First Minister Martin McGuinness and other senior party figures - although the 'Fresh Start' deal between SF and the DUP has a commencement date for a 12.5% rate of April 2018.

Mr McGuinness has reiterated his party is as committed to the move as the DUP, while colleagues have indicated it could depend on the accompanying reduction to Northern Ireland's block grant estimated at between £200m and £300m.

Mr Smyth, CBI director, said, however: "I'm confident it is going to happen. It has to be built into the Budget over the summer. Any uncertainty is unhelpful. Companies are not going to wait forever."

Claiming SF are "backsliding", UUP economy spokesman Adrian Cochrane-Watson warned Mr McGuinness already reneged on an agreement also involving his party, the SDLP and Alliance in February 2016 for a 12.5 % rate as early as April 2017.

"Unless Sinn Fein once and for all clarify their position, it looks like the dysfunctional parties who have dominated the Executive since 2007 have proven themselves entirely incapable of making fiscal decisions and sticking by them," he argued.

And Conservative candidate Frank Shivers said: "Unless we hear Martin McGuinness publicly state that they are going to implement the cut (in the Block Grant) we must conclude they are simply treating the electorate as fools."

During a recent visit to the United States with the First Minister, Mr McGuinness said, however: "The combination of tax, talent and value will make the north of Ireland an even stronger contender when pitching for new investment."

But his party colleague Chris Hazzard said this week: "Corporation tax isn't going to be the silver bullet that a lot of people think that it is. The Fresh Start Agreement says 'if it is affordable, we will agree'."

The Fresh Start document states: "The Executive is committed to a more competitive Corporation Tax rate"

But the day after that agreement, Sinn Fein leader on Belfast City Council, Jim McVeigh, said: "As for Corporation Tax, we won't be signing up to any cut unless we can afford it and we won't be able to afford it any time soon comrades! This is about taking further fiscal powers back to Ireland."

Belfast Telegraph

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