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Lords pass corporation tax-raising powers for Stormont

By Nicholas Randall

The Bill devolving corporation tax powers to Stormont has passed its final hurdle at Westminster - although a Tory peer described the legislation as "not unionist".

All that is now required for the Bill to become law is the Queen's approval - little more than a formality.

While support for the Bill has been widespread, there was a late intervention in the House of Lords by a Conservative peer.

Former Secretary of State for Scotland Lord Forsyth of Drumlean criticised the legislation as "not unionist".

He said: "If we think that there is such a huge problem from tax competition from the Republic of Ireland, the answer to that is to reduce our corporation tax rates nearer to the Republic of Ireland.

"But the reason why we don't do that is because the cost would mean we would have to make cuts in other services, such as health and education and exactly the same applies to Stormont."

He added: "This tinkering is inimical to a United Kingdom."

However, his party colleague, Northern Ireland Secretary Theresa Villiers, said later that 40,000 jobs could be created by the legislation.

She said: "The new tax-setting powers will only be commenced if the Executive parties put their finances on a long-term sustainable footing. Changes to the welfare system are a key part of this. I hope the parties will continue to work hard to resolve current issues and ensure this enormous opportunity is not lost."

Sounding a note of caution, Belfast's Baroness May Blood said that if the change came into effect in 2017, the block grant would be cut before any of the benefits of a reduced rate of corporation tax came through. "It's almost like being asked to pay for your dinner before you've seen the menu," she told peers.

However, Liberal Democrat and former Alliance leader Lord Alderdice said this was an opportunity for politicians to face up to the economic and political challenges of instituting a corporation tax rate which was closer to that levied in the Republic.

"This is where we move from institutions of power-sharing to the reality of responsibility-sharing," he said.

Introducing the legislation, Baroness Randerson had said it would allow Northern Ireland's economy to be "rebalanced" away from over-reliance on the public sector.

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