Investors require better incentives
Published 21/03/2013 | 04:20
On a personal level it was a reasonable Budget for Northern Ireland.
An increase in the threshold at which you start paying tax, cancellation of the 3p duty increase on fuel which will benefit motorists and haulage firms alike, more support for childcare and homebuyers, and even more money for the Stormont coffers all added up to a positive package for the province. At a time of austerity it was as good as anyone could have expected.
But the big question is – is it good enough for a local economy which is in the doldrums and dragging behind the rest of the UK? The question is especially pertinent given that unemployment here has reached a 15-year high, undoing all the so-called peace dividend in the first decade of the new millennium. The worrying prospect is that there is no sign of a resurgence in our fortunes. It is going to take something imaginative to kick-start, never mind rebalance, the economy.
Much hope had been placed on Stormont being given autonomy to vary the corporation tax rate to bring the province closer to the rate in the Republic, which has been rewarded with significant inward investment because of its low corporation tax. The Chancellor yesterday lowered the UK corporation tax rate to 20%, the lowest of any major economy. That could herald bad news for Northern Ireland as it could be interpreted as a signal that Westminster will keep control of the tax and end our hopes of a game-changing initiative.
Meanwhile, our political leaders have defended their trips to Brazil and Washington, saying that they could lead to investment here. While there has been some criticism of the number of people on the trips and the cost of the accommodation, the First and Deputy First Ministers have a duty to promote the province as an investment location and any jobs following their trips will be both warmly welcomed and badly needed. But we still need to make Northern Ireland especially enticing for inward investors and yesterday's Budget will not do that.