Corporation Tax: We delay at our peril
Decisive action is urgently needed in the move to cut corporation tax and overhaul the planning system, says Wilfred Mitchell, FSB Policy Chair
The Finance Minister Sammy Wilson has suggested that Northern Ireland may have to wait for another four years before being able to cut corporation tax. If this delay were to become a reality, it would be enormously detrimental to the entire local economy.
A swift reduction in corporation tax is an essential element in getting our economy back on track and will be the driving force in ushering in a raft of much-needed growth, investment and employment.
It is vital that it remains a priority for Government and must be brought to fruition as a matter of urgency so that it can help to deliver recovery. It cannot be postponed until some distant date by which the improving economy in the rest of the UK allows an increase in subvention that is sufficient to pay for it. The NI economy requires this step change now, at this very low point in our employment and business fortunes.
This tax change will be a key ingredient in helping to encourage much-needed new job creation in Northern Ireland. This, in turn, will benefit the economy as a whole, helping it to recover from one of the longest and deepest periods of recession ever experienced.
By suggesting it will not be implemented in the lifetime of the current Assembly is yet another sucker punch to the local economy and comes at a time when it needs all the assistance from Government it can get.
While most ministers and MLAs are determined to see the tax cut as a matter of urgency, the finance minister’s concerns also need to be addressed, but this needs to happen urgently, rather than four years hence. Indeed, the drive to cut corporation tax in Northern Ireland is exceptional, having gained cross-party political support as well as encouragement from all sectors of the business community. It will create a level playing field with our neighbours in the Republic and help make Northern Ireland a much more attractive prospect for foreign direct investment, as well as encouraging both established and new indigenous businesses.
Our politicians and business leaders have made their feelings and support known. What we need to see now is a definite decision being made on the principle of this initiative being introduced to allow businesses ample time to prepare for its eventual implementation.
However, reducing corporation tax is only half the story in helping to create economic growth and it must come hand in hand with a complete overhaul of our bloated and lethargic planning system.
With corporation tax cut, economic recovery will be dependent on bold decisions and quick thinking. This cannot be hampered by the age-old problem of serious delays in decisions relating to planning.
It is imperative that the Assembly ensures paths are cleared to ensure businesses seeking to locate here, or existing businesses hoping to expand, are allowed to do so promptly, rather than languishing in bureaucratic planning paralysis as so many others have had to suffer in the past.
The revised planning system must be sympathetic to the business community and should complement the cut in corporation tax to ensure the full potential of the ground-breaking change is seized and maximised upon. In addition it must provide prompt decisions on applications with less red tape and fewer hurdles for investors to navigate as they attempt to locate here or grow their existing business.
Combined, these measures will offer the local economy a real shot in the arm following months of consecutive downturn. Furthermore, by reducing corporation tax the private sector will be entrusted with a greater control of its own destiny and will send out a clear message of the Assembly’s intention to grow this area of the economy and move away from Northern Ireland’s over-reliance on the public sector.
Reducing corporation tax will create a bigger, stronger private sector and this will flow out into all areas of the economy, benefiting all of us. This is a golden opportunity that Northern Ireland, the Assembly and the finance minister cannot afford to miss.