Editor's Viewpoint: Delay is bad news for our economy
Published 11/10/2011 | 08:00
First Minister Peter Robinson is right to voice his disappointment at the delay on reaching a decision on the devolution of corporation tax powers to the Assembly.
The potential stimulus to the economy of bringing down the tax levy to a level approaching the 12.5% operating in the Republic has been debated for long enough. It is generally accepted that the low tax rate has been a powerful lure in attracting investment into the Republic and there has been no coherent argument put forward to say that it would not work on this side of the border also.
Further proof of the need for a strong, vibrant private sector with companies geared up for export was given last week when it was announced that the Republic - in spite of its austerity budget and in spite of its huge debts - is performing very positively in economic terms. Exports have given the economy a boost and, while no one denies that it still have many challenges ahead, there are signs of economic growth.
Unfortunately similar signs are very difficult to find in Northern Ireland. The economy is stagnant and remains overly dependent on the public sector which is facing huge budgetary cuts. It needs a game-changing initiative and that initiative is a lowering of corporation tax. Initial optimism that the Treasury would accede to devolving corporation tax varying powers to the Assembly have faded somewhat and the announcement that any decision is likely to be delayed until early next year gives cause for concern.
Cynics might suggest that the new taskforce set up to look at the issue - and what the cost might be to the Northern Ireland block grant - is just a way of putting it on the long finger. Certainly there seems little enthusiasm for the idea from the Treasury, in spite of promises from Chancellor George Osborne of a decision by this autumn. While London prevaricates, Northern Ireland continues to languish as something of an economic backwater. That simply is not acceptable.