Although the case for a cut in corporation tax in Northern Ireland remains valid — perhaps more so now than ever — there is no doubt that the rebuff the campaign received at the hands of the Varney Report was a setback.
But while the Treasury is refusing to budge, it is vital that the Northern Ireland economy is not left in limbo. To this end, the report by Richard Ramsey of Ulster Bank should be heeded by the Stormont Executive.
The economist argues that Ministers now need to devise a Plan B and focus on areas which they can influence. He suggests that at a time of global slowdown, Invest NI needs to concentrate more on the needs of indigenous companies.
In this, he has a point. Despite the kudos won by the US:NI Investment Conference, many multinational companies have pulled their horns in. While Northern Ireland must still set out its stall, the flow of potential inward investors has trickled to a stream.
Northern Ireland, in common with the rest of the UK, is set for a rough ride and it is vital that every possible support is made available to help local firms survive the challenges. Indeed, one of the key strands of the Varney Review was that the private sector in Northern Ireland must be strengthened in order to help the province’s economy wean itself of public sector dependency.
That is a laudable objective, but some caution must be exercised. Before the public sector leg of the economic stool is shortened, other supports must be set in place.