Corporation tax hopes grow
Osborne’s cut to UK-wide business levy is positive sign, say ministers
Northern Ireland’s corporation tax hopes became more affordable on Wednesday — despite being left out of George Osborne’s mini-budget.
A cut to the UK-wide rate means Northern Ireland’s economy would take less of a hit if Stormont was handed control of the tax by Westminster, ministers said.
The statement revealed worse-than-expected growth figures and forced the Chancellor to admit he had missed his fiscal targets.
Labour accused the Government of “doing nothing” to reduce Northern Ireland’s youth unemployment rate.
Shadow Secretary of State Vernon Coaker (right) said: “The Westminster government needs to get a grip, and take action now to tackle youth unemployment in Northern Ireland.”
But Northern Ireland Secretary Theresa Villiers insisted the Government was “repairing the mess” left by Labour.
The UK-wide corporation tax rate will be reduced faster than expected, to 21% by 2014, Mr Osborne said.
Last night, Ms Villiers told the Belfast Telegraph this meant any reduction to the block grant would be “rather less” if Prime Minister David Cameron does give Stormont permission to cut its rate further to compete with the Republic.
She said the new squeeze on welfare payments, which will raise £3.7bn for the Treasury, had been “a hard choice we had to make”, saying the Government had “reflected very carefully” on the impact on hard-up people. And she insisted: “There is some good news in this announcement for Northern Ireland.”
Trade unions in Northern Ireland have been up in arms about the possibility of regional, rather than national rates of public sector pay.
Documents published with yesterday’s statement confirmed the plans had been rejected by the bodies in charge of setting pay, apart from those responsible for schools. Deputy Prime Minister Nick Clegg said it had been looked at, but the matter was “closed”.
A new wave of infrastructure investment was confirmed by Mr Osborne, triggering £132m of “consequential” payments in Northern Ireland’s block grant. Under a borrowing arrangement between the Executive and Westminster, up to £50m will be pumped into upgrading the A5.
And the decision to exempt Northern Ireland’s electricity generators from the carbon price floor was aimed at putting our power plants on a level playing field with the Republic.
The 3p increase in fuel duty, planned for January, was cancelled, to the delight of all.
But Mr Osborne also said austerity measures would be extended to 2018, and confirmed he was missing his key debt-reduction targets.
However, he insisted: “The British economy is healing.”
The key points of George Osborne's Autumn statement
- The shelving of controversial moves towards regional rates of public sector pay, which would have hit Northern Ireland hard.
- A £132m cash injection for capital |projects in Northern Ireland.
- A boost for energy jobs with a tax break allowing Northern Ireland’s electricity |generators to compete with the Republic.
- Confirmation that Londonderry’s |broadband will be upgraded to “super-connected” status.
- The freezing of fuel duty.
- A three-year squeeze on benefits, which will only be increased by 1% every year.
- A raid on top-earners’ pensions.
- An extra year of spending cuts.