Belfast Telegraph

Monday 22 September 2014

No decision on corporation tax until after Scotland referendum

There will be no decision on the devolving of corporation tax powers to Northern Ireland until after Scotland's independence vote next autumn, it has emerged.

It was revealed following a long awaited meeting between Prime Minister David Cameron and the First and Deputy First Ministers at Downing Street this afternoon.

Martin McGuinness said the UK government had made it "absolutely clear" that it will not make a decision after autumn 2014.

First Minister Peter Robinson vowed to not to give up the fight for the power.

There had been hopes a decision would be reached today.

A host of Northern Ireland's firms and business groups have been piling pressure on Mr Cameron to make what many perceive as a key decision in helping to reinvigorate the local economy.

This afternoon followed meetings carried out by a working group last year - made up of both politicians from Stormont and Westminster.

Speaking at Downing Street this afternoon, both Mr Robinson and Mr McGuinness said they were "disappointed" with the outcome of the meeting.

Mr McGuinness said: "It's very, very clear from the meeting that the whole issue of the referendum in Scotland is playing in big time to this debate on corporation tax and I think it is absolutely clear that no decision will be taken on this issue this side of the Scottish referendum. I think we have to face that reality."

Mr Robinson said he had made it clear to Mr Cameron that he thought holding back on making a decision would be counter-productive to the campaign against Scottish independence.

"We can't understand that reasoning because we think it sends a message to the people of Scotland," he said. "What, effectively, you are saying to the people of Scotland is that if you want more fiscal autonomy than you have at the present time the only way to have it is through independence. I think that is the wrong message for the government to be giving to the people of Scotland."

He added: "There is absolutely no reason why a decision could not be taken today if there was the political will to take that decision today."

Mr Robinson said the meeting had been adjourned rather than completed because a "number of other issues" required officials to meet in the next few weeks. The leaders will then meet again in April.

The decision to allow the Assembly to set its own corporation tax rate remains on of the few issues which has received support from across the political spectrum.

There are hopes the business duty can be lowered from the existing rate of 24% to allow the north to compete with firms in the Republic.

There have been calls over the last few years from business groups, calling for the rate to be reduced.

Grow NI - which is made up of a range of business interests including the Confederation of British Industry - had urged the Prime Minister to agree on the devolution of corporation tax powers.

Interest in bringing the business duty powers to Northern Ireland came in 2007 with the Varney Review.

It was set up by the then chancellor Gordon Brown to carry out a review of tax policy with a focus on trying to harmonise Northern Ireland's rate with the Republic.

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