Economy boost call follows tax blow
Northern Ireland must "press on" with measures to boost its economy while the question of a corporation tax cut remains on ice, it was claimed.
The Prime Minister this week told the First Minister and Deputy First Minister that there would be no 'yes or no' response to the long-running campaign in favour of reducing the 23% rate closer to that of the Republic's 12.5% until after September 2014.
Businesses yesterday insisted the issue was still a live one. The Northern Ireland Chamber of Commerce said: "We must ensure that corporation tax issue remains a priority and is resolved before the next general election, but also press on with other measures to boost our economy."
One such measure was enterprise zone status for the province, which would foster a business-friendly environment with conditions such as 100% relief on rates for the first three years for new-starts, a simplified tax credit system and a reduced rate of Vat on domestic property repairs.
It also called on the Assembly to ensure the environment was conducive to success by addressing planning and improving the infrastructure improvements.
It was critical to address Northern Ireland's low levels of export, with just 2% of registered businesses actively exporting.
Accountant Richard Murphy, an outspoken opponent of the cut because of the cost to Northern Ireland's block grant and the risk that the province would become a tax haven, also called on politicians to come up with ideas.
"The problem is that all five Northern Ireland parties have clung on to this life-raft of an idea that every problem would be solved with lower corporation tax.
"They must have a serious debate and come up with a serious economic strategy," he said.
He suggested following the example of Birmingham, which had developed £100m in business activity through the public and private sector 'green new deal' in which housing stock was made more environmentally-friendly.
Green Party leader Steven Agnew MLA, whose party was also opposed to the tax cut, said he supported the prospect of the Green New Deal returning to the agenda in Northern Ireland.
"The deal was a scheme which would have improved energy efficiency for all of our housing stock, created jobs and would have helped tackle fuel poverty while reducing bills for householders and harmful emissions.
"Regrettably, the Green New Deal was recently rejected by the Social Development Minister but I believe now is the time to put this back on agenda and deliver a public investment scheme with guaranteed returns to the local economy," Mr Agnew said.
The CBI – whose chairman Ian Coulter has been one of the main proponents of a change – said the tax cut remained "the only transformative tool to rebalance our economy". There were other measures which could help – such as tackling under-achievement in education and granting planning permission to the north-south interconnector to reduce business energy costs.
But a CBI spokeswoman said those were all "short-term changes and will not address our long-term structural issues".
Eamonn Donaghy, head of tax at KPMG and spokesman for the pro-corporation tax cut lobby Grow NI, suggested there was no other way forward. He said: "If we could have come up with a plan B by now, we would have. All the other stuff may help with the margins but it's not going to make the structural change we need.
"Corporation tax wasn't a magic wand but it was a very substantial structure around which the economy could be rebalanced."
MLAs urged to copy Birmingham scheme to help businesses