Belfast Telegraph

Friday 24 October 2014

Corporation tax may not be the only gift from Whitehall

From the tortuous progress made by the negotiations on Northern Ireland's corporation tax rate, you might think the Government is unwilling to give up powers.

But while Stormont wrestles to loosen the Treasury's grip on business taxes, parts of England are drawing up wish-lists for the powers they want from Whitehall.

The latest 'city deals' were unveiled yesterday by Deputy PM Nick Clegg. Twenty regions of England are bidding to take on new responsibilities, including over finance, as part of what is being heralded as a 'revolution' in the way localities are run.

The concept has already been applied to the eight 'great cities' outside London. As a result, Bristol is going to be handed its entire transport budget from central government, without having to submit bids for individual projects. We are told this will lead to improvements to its railways.

Birmingham is getting its hands on a new £1.5bn investment fund, while Manchester is able to secure extra tax revenue that would have returned to the Treasury if it invests in infrastructure.

It remains to be seen whether city deals will truly herald a shift in the relations between local and central government, but local leaders of all parties are excited about what's going on.

Promising to devolve power from Whitehall is a classic tool used by all parties in Opposition. This Government's attempts, so far, have had mixed results.

So, while city deals could be taking off, an attempt to install elected mayors in the biggest cities backfired badly, as all but one referendum yielded a No vote.

We will hear more ideas about boosting the economy outside London today.

Lord Heseltine wants to reorganise local government and pump money into regional bodies set up to investment in business.

Parties are divided about the way this should be done. Labour set up - then ditched - regional assemblies.

It also created the more business-orientated regional development agencies - the equivalent of Invest NI - which have been abolished in England by theCoalition.

City deals are the latest attempt to end the dependence on London of the rest of England. Meanwhile, enterprise zones are springing up.

While they are much talked-about in Northern Ireland, they have yet to appear.

If city deals are successful, the pressure will be on Northern Ireland to rise to the challenge posed by these beefed-up bodies throughout England.

Now, about that corporation tax rate ...

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