Belfast Telegraph

Saturday 26 July 2014

Varney urged to deliver on corporation tax reduction

The outcome of the Varney Review will be the "acid test" of the Government's willingness to help Northern Ireland raise its game, it was made clear today.

Sir George Quigley, chairman of the Industrial Task Force, was commenting in advance of the publication of the report by Sir David Varney.

It is expected that the report will appear in early October, perhaps shortly after Parliament resumes on October 8.

One distinct possibility is that Sir David's review, which is being carried out for the Treasury, will be published along with the Government's pre-Budget Report, which is scheduled for October.

Sir George said that since the campaign for a competitive tax regime in Northern Ireland had got under way, the evidence of the need for such a change had been steadily strengthening.

" With the public purse strings tightening, future growth possibilities lie within the private sector.

"A 12.5% standard rate of corporation tax would give a significant boost to our existing business base as well as increasing our ability to attract the multinationals.

" Although small economies can do a lot for themselves, they must also import world-class technologies to support an advanced economy and achieve world-class living standards."

Sir George said he believed that the case which had landed on Sir David's desk was "absolutely compelling".

"It is difficult to see how, in the face of all that evidence, any review could conclude that a competitive rate of corporation tax is not crucially important, particularly in circumstances in which we share a small island with an economic player which deploys the tax weapon to great effect."

Sir George said that the Government's existing policies had failed to produce the high value added economy which Northern Ireland needed in order to raise living standards and close the wealth and productivity gap with Scotland and the Republic.

" Sticking with failed policies will not create the new future which a much more self-confident Northern Ireland is determined to have," he added.

"The outcome of the Varney Review will be the acid test of the Government's willingness to help us raise our game and stand more on our own feet, to the benefit of the UK generally as well as in our own interests."

The Stormont Executive, which is expected to make a final pitch to Sir David as he completes his report, believes that thanks in part to strong lobbying by the business community the economic argument for a cut in corporation tax has been won.

But Ministers are understood to be concerned that Gordon Brown may be fearful of upsetting voters in other regions such as Scotland and Wales.

While there is an onus on Sir David to recommend measures which will improve Northern Ireland's competitiveness, it is understood that Ministers are not yet convinced that he will deliver fully on corporation tax.

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