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Violent summer and Assembly in crisis will scare off investors, warns Secretary Northern Ireland Villiers

By Liam Clarke

Scenes of violence being broadcast around the world over the marching season are the last thing Northern Ireland needs right now and would be "potentially menacing for investment", the Secretary of State has warned.

Theresa Villiers painted a bleak picture of Northern Ireland's economic future if the parties cannot resolve the financial crisis at Stormont.

She said TV pictures of rioting would create an impression of political instability and scare off investors.

And she also warned that the devolution of Corporation Tax is no longer guaranteed unless Stormont can balance its books within weeks, and government loans are in jeopardy.

But she added that she is willing to accept a DUP "fantasy budget" as a stop gap measure to buy time and help avert an immediate crisis.

Asked about parades, Ms Villiers told the Belfast Telegraph that "political instability is potentially menacing for investment".

She said the Province was still attractive to investors but added: "It is crucial that we have a peaceful parading season, that the determinations of the Parades Commission are obeyed and respected and that any protests are both peaceful and lawful. The last thing we need to do at this time of year, at a time when we have talks potentially, is to have another public order problem which would potentially be broadcast across the whole of the world."

The Rev Mervyn Gibson, a leading Orangeman, said: "We are working and hoping for a peaceful marching season as we do every year."

Ms Villiers was speaking to journalists at the Belfast headquarters of the CBI, a business lobbying group which has been campaigning for the devolution of corporation tax powers.

This tax on business profits is charged at a much lower rate in the Republic.

The snag with reducing it here is that under EU rules, it comes out of the Stormont budget.

Ms Villiers said: "If the Executive parties are unable to resolve that dispute it would become impossible for those powers to be devolved.

"And if they were, it would still be impossible for the Executive to implement a reduction in corporation tax."

This is because Stormont would not have enough money to cover the reductions.

Ms Villiers said that devolving powers over corporation tax "could generate literally thousands of jobs".

The Republic's rate is 12.5% and the UK's is 20%.

The Secretary of State was clear that there was nothing more her government would give financially.

Instead she urged the local parties to implement the Stormont House Agreement which they agreed before Christmas but which Sinn Fein and the SDLP say is insufficient.

While initially backing the welfare element of the agreement, Sinn Fein changed stance three months later, claiming that Executive-funded top-up measures to support claimants losing out under the new system were not as comprehensive as it believed were envisaged in the accord.

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