Hi °C | Lo °C Business leaders, Ulster MPs and the Executive are united against Westminster moves to strip Northern Ireland of its automatic entitlement to regional aid.
The aid is used by the Executive to attract investment and stimulate growth.
Critics say the move would hit the economy which is still reeling from the recession and lead to vital foreign investment going elsewhere.
The whole of the province has enjoyed ‘automatic assisted area status’ for over a decade, and it is seen as a key reason why major foreign companies have chosen to invest here.
Now, under pressure from regions in England, ministers are set to remove this in an attempt to create a level playing field across the UK.
Parts of Northern Ireland would still be eligible for aid, but without the automatic 100% coverage there are fears that investment could become fragmented across the province.
Finance Minister Sammy Wilson (below) said: “In Northern Ireland this causes all kinds of political problems across the nationalist and unionist divide, between east and west, and at a time when we are trying to rebalance the economy.”
A consultation into ending Northern Ireland’s status ended last month. Responses from the Northern Ireland Executive, Invest Northern Ireland, Belfast City Council and the CBI (Northern Ireland) were among those urging a rethink.
Invest NI said the Troubles remained a “major bar rier” to securing foreign investment, and said financial incentives were vital to the region.
It also feared that the corporation tax gap with the Republic would be exposed if the State was unable to offer support for companies looking for where to invest.
In its response, the Assembly said the Government's proposals were “totally at odds” with its proposals to rebalance the economy.
The Westminster Government admitted Northern Ireland argued “very strongly” against the move, but the 12 responses received from English areas were in favour “so that the whole of the UK could be considered equally on the basis of evidence and statistically-proven need”.
SDLP leader Alasdair McDonnell added: “Northern Ireland moved forward economically in the aftermath of the Good Friday Agreement but has slipped back following the economic crisis.“
Background
Every six years, each government in Europe notifies the European Commission of ‘assisted areas’ to comply with State aid laws. They are places where grants can be given to firms to create favourable conditions for investment. All of Northern Ireland has been given automatic coverage, partly because of the Troubles and also because of its unique economic situation and border with the Republic. But legislation is expected to be introduced to remove this in the autumn.
