Corporation tax cut will cost us all
For years there have been calls to devolve corporation tax to Northern Ireland. The discussion has been very one-sided, with the supposed benefits played up constantly while little, if any, attention has been paid to the very real dangers of handing this power over to Stormont.
It is contradictory for the local parties to complain about cuts to the block grant - the money Northern Ireland receives from Westminster - and at the same time campaign for the devolution of corporation tax, as under EU law any cut in corporation tax will mean a corresponding cut to the block grant.
According to figures in a Treasury consultation in 2011 this would amount to a cut of £110m, £235m, £265m, £265m and £270m in each of the first five years in which there was a 1.5% reduction in the rate of corporation tax in Northern Ireland. Our own Department of Finance and Personnel estimated that the direct cost to the block grant could be in excess of £400m by year five.
A PricewaterhouseCoopers report has cited survey evidence showing that the level of corporate taxation and labour costs appear to be of less importance than other non-tax factors. On the other side of the coin, Northern Ireland will have to bear the cost of a cut to its block grant, meaning even less money for our schools and hospitals at a time when they are already having to deal with significant fiscal pressures.
Simply put, a cut in corporation tax has very certain costs for Northern Ireland and very uncertain gains. Small wonder that the Silk Commission into further devolution to Wales recommended in 2012 that corporation tax should not be devolved to Cardiff "as the costs would outweigh the benefits".
Add to that that Stormont is "dysfunctional" and "not fit for purpose", according to Peter Robinson, and I think anyone would have second thoughts about letting the local politicians have these powers.
For our part, TUV believes that we should maintain the UK's unified taxation system. That should be the natural position for any unionist. It also makes sound fiscal sense for Northern Ireland.
Samuel Morrison is a member of the Traditional Unionist Voice party