Belfast Telegraph

Treasury 'not keen' on corporate tax move

Wilson launches verbal attack on mandarins for causing delays

By Tom Moseley and Clare Weir

Treasury officials have made it "quite clear" they're not keen on devolving corporation tax to Northern Ireland, Finance Minister Sammy Wilson has said.

He outlined a string of roadblocks that have dragged out the project to hand Stormont the power to make a badly needed cut in the tax rate.

Mr Wilson's comments came after First Minister Peter Robinson told business leaders that civil servants were "crafting" ways to make the change seem less attractive to the Executive.

Joining the attack on Whitehall mandarins, he told the Belfast Telegraph: "It's like a plumber coming to your house. You tell him what you want done, and then he whistles through his teeth and gives you all the reasons why it will be difficult."

Official estimates of the cost had started at around £390m, he said, but had spiralled as new complications emerged.

Mr Wilson said the Treasury had taken a "liberal" view of the costs when it calculated the impact of large companies that declare their profits in Great Britain. There was also confusion over whether banks' profits should be included in the calculations.

"They keep adding different nuances", Mr Wilson said.

"Our suspicion is they do it because they want to justify the higher figure."

Politicians had initially been told the measure could be tagged on to the annual Finance Bill, used to implement the measures contained in the Budget. But it now appears a new Northern Ireland Bill would be needed in the Queen's Speech, which would require a bid to be lodged by the Northern Ireland Office.

Mr Wilson said: "It appears the legislative arrangements are becoming more complicated by the day."

He also said that while European officials had signalled that complying with state aid rules would be straightforward, the Treasury "seemed to be throwing all sorts of issues" in the way.

At Tuesday evening's event, in London, Northern Ireland Secretary Owen Paterson re-iterated his commitment to the move, although he insisted the deal had not yet been sealed.

CBI Northern Ireland, which organised the gathering, said a decision by the end of the summer was essential. This is the timescale promised by the ministerial working group that is currently examining the policy.

A Treasury spokeswoman said the next meeting of the joint Westminster and Stormont Ministerial Group on Corporation Tax will take place on June 25.

The group is chaired by Treasury Minister David Gauke, who appears far less enthusiastic than Mr Paterson, said Mr Wilson.

The biggest boost to the campaign would come if Chancellor George Osborne gave it "unambiguous backing", he added.

Meanwhile, the chair of an influential economic group which advises on the issue of corporation tax said it was unfair to lay the blame at the feet of civil servants.

Kate Barker of the Economic Advisory group is a former member of the Monetary Policy Committee, former chief economic adviser at the CBI and current non-executive member of the Office for Budget Responsibility.

She said that while the decisions in Whitehall are taking a long time, there are other global factors to consider.

"First of all we are lucky to have a Secretary of State for Northern Ireland that is so supportive and positive on this," she said.

"I do agree that it is taking too long. As much as the UK Treasury has to be careful, the process is taking much longer than I would like."

£390m

Estimate of the cost of devolving corporation tax

£220m

Lower estimate by those keen on devolved power

June 25

Date set for Westminster meeting on the issue

60

Number of business leaders at CBI event10

'Commandments' for civil servants: Gus O'Donnell

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