Hi °C | Lo °C I write with reference to your article earlier this week which was supported by a poll on the subject of corporation tax.
Current uncertainty over the economy and the situation in the Eurozone inevitably makes people uneasy, so when faced with a question that suggests a reduction in public spending will be required to allow the Executive to cut corporation tax, it is hardly surprising that a significant number of people (34%) were unconvinced and yet more (36%) did not know. This is understandable, yet it arises because of a fundamental misunderstanding.
The decision that our politicians will make by cutting corporation tax is to invest in jobs; it is a no-brainer, and should command support from the public. It is essentially a transfer of spending from public sector control to private sector control, but, crucially, it is not a reduction in spending in the region as a whole.
The "cost" of cutting the tax will be calculated to be exactly the same as the amount of tax that is being left here in the economy rather than paid to HM Treasury, so Northern Ireland will still have the same amount of money in its economy, growing rapidly as the policy starts to take effect.
The general public and politicians alike are aware that it is the private sector that needs to grow and do so rapidly if we are to provide jobs; cutting corporation tax is the key to getting there.
Ask the population in the Republic of Ireland whether they would give up their low rate of corporation tax, and there is an overwhelming recognition that they need to keep the rate low if they are to continue to attract and keep the tens of thousands of quality jobs that they rely upon to get their economy back on track.
The political parties here at Stormont are united in their commitment to cut corporation tax, as are all of the business organisations. This is a sign of the maturing of local politics.
Frankly, cutting corporation tax as a way of attracting foreign direct investment and of boosting indigenous firms is hardly a subject likely to rivet the general public, but ask them if they would like their politicians to invest heavily in creating and attracting tens of thousands of new jobs to the province and politicians will get a resounding endorsement.
Wilfred Mitchell OBE
FSB Policy Chairman
