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Corporation tax move will be financial disaster

LAST Tuesday's Belfast Telegraph contained the scariest story I have seen for a long time.

If readers were warned to expect the early introduction of water rates, there would be a public outcry. In fact, it was worse: John Simpson told us that the devolution of corporation tax powers is coming, "so get ready for it".

What does this actually mean for the hard-pressed economy? In order to reduce the tax-burden on company profits, an equivalent amount must, under EU rules, be deducted from Northern Ireland's annual budget.

In a debate on the Nolan Show a couple of years ago John Simpson conceded that it could take 15 years for the policy to "break even" by bringing in more money than is lost from Stormont's budget.

Meanwhile, the annual (yes, annual) loss to the local budget has been calculated at anywhere between £350m and £600m.

Where will the lost money go? Into the pockets of company directors. Where will it come from? From health and schools budget, from policing, from the environment, from welfare and benefits.

In effect, this is water rates in reverse: instead of imposing water rates on us, Stormont will be allowed to slash an equivalent amount from public finances.

It will require the introduction of water rates just to plug the gap and save the health service.

It is time for politicians and public alike to break the conspiracy of silence and speak out about this looming financial disaster.

OBSERVER

Belfast

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