Villiers warns over tax devolution
Stormont will need to be in the best possible shape if corporation tax powers are to be devolved, Northern Ireland Secretary Theresa Villiers has said.
The impasse over welfare reform and the budget need to be sorted out because local ministers would struggle to fund a corporation tax cut while paying rising bills for a more expensive social security system, Ms Villiers told a fringe event at the Conservative Party conference.
Prime Minister David Cameron announced in March last year that a decision in principle on whether to devolve power to cut the levy on business profits will be taken no later than this year's Autumn Statement.
Ms Villiers said: "Stormont needs to be in the best possible shape if it is to take on such a significant fiscal devolution.
"That means sorting out the impasse on welfare reform and the budget since it is hard to see how the Executive could fund a corporation tax cut as well as meeting mounting bills to run a more expensive welfare system."
She said officials had identified minimising the burden on small businesses while differing treatment for large businesses to contain the risk to the broader UK tax base from profit shifting.
The UK Government has also had some informal discussions with the European Commission on state aid implications, whether the tax rate in Northern Ireland could vary from the rest of the UK under EU law.
Ms Villiers added: "I'm pleased to say that this has not so far uncovered any insurmountable concerns, though we can't yet be certain of what the Commission's final view would be."