Belfast Telegraph

Friday 19 September 2014

Corporation tax debate shelved

A key Westminster debate into Northern Ireland's economy will not take place until next year, it has been revealed.

The Northern Ireland Grand Committee was set to discuss plans to 'rebalance' the province's economy, including the long-awaited devolution of corporation tax, next Tuesday.

Now the agenda has been quietly changed, and rather than grappling with rising unemployment and examining how to boost investment, MPs will now debate Prime Minister David Cameron's controversial 'Big Society' vision.

The Northern Ireland Office played down the significance of the change, saying it was because government responses to the consultations on corporation tax as well as Air Passenger Duty had not yet been published.

It has sparked fears that the corporation tax cut is meeting resistance, with the Government not wanting the matter to be debated at length so close to its autumn budget statement.

Finance Minister Sammy Wilson has already said he believed any cut would take at least four years to implement.

The Northern Ireland Grand Committee consists of all of the province's MPs as well as up to 25 other members of Parliament and ministers.

It meets periodically to discuss legislation that applies to Northern Ireland and other key issues.

The consultation into rebalancing Northern Ireland's economy, which includes the corporation tax proposal, finished in July.

A working group, including Northern Ireland Secretary Owen Paterson, has now been set up to iron out issues that were not settled by the consultation, including the size of the hit taken by the public sector as a result of the corresponding cut in the block grant.

The Northern Ireland office said a Grand Committee meeting on the economy would now take place "in the New Year".

Labour's new Shadow Northern Ireland Secretary, Vernon Coaker, said: "They do not feel they have got enough information for this debate on November 1.

"But I think there is a need for the Government to get a move on, and start to get some of these basic questions answered, so people can actually see what the consequences are."

SDLP leader Margaret Ritchie said: "I find it a bit bizarre. I was not given an official reason. I presume it's because of the working party set up to look at it. For me, that's not good enough."

Nigel Dodds, the DUP's Westminster leader, said he had been told the topic had been changed at the request of the Northern Ireland Select Committee.

He said: "I would have much preferred to discuss the economy at this stage but this is really a matter for the Government."

Factfile

Corporation tax is 28% in the UK, but only 12.5% in the Republic, which business leaders say is stifling inward investment. Campaigners argue that bringing the tax into line with the Republic could help invigorate the economy here. The UK rate is expected to fall to 24% by 2014 - still significantly above the rate in the Republic. The transfer of the power to vary the tax to Stormont would mean a corresponding cut in the block grant from Westminster.

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