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Unite warns against impact of lower Corporation Tax rate in Northern Ireland

By Noel McAdam

Published 24/11/2015

First Minister Peter Robinson and Deputy First Minister Martin McGuinness sign the copy of the document 'A Fresh Start - The Stormont Agreement and Implementation Plan' pictured at Stormont Castle.
Picture by Kelvin Boyes / Press Eye
First Minister Peter Robinson and Deputy First Minister Martin McGuinness sign the copy of the document 'A Fresh Start - The Stormont Agreement and Implementation Plan' pictured at Stormont Castle. Picture by Kelvin Boyes / Press Eye

Britain’s most powerful trade union chief has warned against the impact of a lower rate of Corporation Tax which now forms the core of the Executive’s future job-seeking strategy.

Last week's 'Fresh Start' deal between the DUP and Sinn Fein finally settled the block on Corporation Tax, setting a date for its introduction - April 2018 and a rate - 12.5%, the same as the Irish Republic.

But Len McCluskey, general secretary of Unite, which has 40,000 members in the province, told the Belfast Telegraph: "Reducing corporation taxes will bring further economic pain to our communities. 

"What will be given away as lower taxes on one hand will mean public sector cuts and lowered living standards with the other.

“The benefits will be largely concentrated in greater Belfast area but it will be our rural and outlying economies that feel the pain.”

And he also called for compromise Stormont’s ‘exit scheme’ which is designed to reduce the public sector by 20,000 jobs over the next few years.

“We need to reconcile the interests of those public sector workers, including Unite members, who may wish to take advantage of such a scheme with the long-term interests of our society and economy, which both depend on a strong, vibrant and sustainable public sector,” he said.

Mr McCluskey, a supporter of the new Labour Party leader Jeremy Corbyn, argued:  “Northern Ireland’s economy faces a range of difficulties: high youth unemployment and emigration, some of the lowest wages in the UK and in October another set of statistics show economic output fell while productivity has fallen at a faster rate than that in the UK.

“Of course, Conservative austerity policies which have cut £1.5 billion from funding for public services bear a large part of the responsibility for the  difficulties between parties in the NI Executive.

“Northern Ireland is still a society in transition from conflict. Austerity policies are felt very keenly here, and they threaten to destabilise the peace.

“The Tories must recognise that continued economic stagnation means a decline in living standards of ordinary people.  This will only undermine confidence from both main traditions in the institutions established under the Good Friday Agreement.”

He ducked, however, the issue of whether Labour should run candidates in elections in Northern Ireland - a position former leader David Miliband had promised to review.

Mr McCluskey said he understood “huge numbers” from the province have joined the party in recent months.

“The question is really whether the Labour party run candidates in Northern Ireland and that is a matter for the Labour party, as a whole, to consider itself,” he added.

Unite argues the Executive has “considerable unused borrowing powers” of about £1.2bn that could be used to fund a public sector investment programme.

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