Belfast Telegraph

Sunday 21 December 2014

We have to tear down peace walls to build a new economy

Unfinished business: Westminster wants to see barriers falling as price for new financial packages
Unfinished business: Westminster wants to see barriers falling as price for new financial packages

With the date for the referendum on Scottish independence finally set for September 18, 2014, devolution is once again high on the Westminster agenda.

The Scots already have broad autonomy over their domestic affairs, while the Welsh Assembly won wider powers for itself in a referendum in 2011.

A commission recently recommended Wales be given new powers over income tax, stamp duty, air passenger duty and business rates.

The Northern Ireland Assembly dreams of that level of control over tax, and those dreams were deftly kicked into the long grass last week by David Cameron.

After meetings with the first minister and deputy first minister, a "possible timetable" for devolution of corporation tax was set for autumn 2014, after the Scottish independence vote.

Devolution of stamp duty and increases in our capital borrowing powers are also being talked about, but no commitments were made.

Peter Robinson's analysis is that the corporation tax decision is being delayed to send a signal to Scots that if they want more fiscal autonomy it can only be achieved by independence.

But a new law passed last year, described as the biggest transfer of fiscal power to Scotland in more than 300 years, means their parliament can now set a Scottish rate of income tax. It also devolved stamp duty and land taxes.

While the political orthodoxy here is that Scotland is the roadblock to devolution of corporation tax, the message from London, and indeed Washington, is somewhat different.

A lack of progress on building a shared society, the billion pounds a year cost of sectarian division, needs to be addressed first.

In her interview with the Belfast Telegraph last week Northern Ireland Secretary Theresa Villiers made clear that Westminster wants "commitments on building a shared society" as part of any new economic package.

US President Barack Obama deployed some fine phrases about trading "bullets for ballots, destruction and division for dialogue and institutions".

Yet, the prime minister would be well within his rights to argue that the promise of both agreements is not honoured while peace walls and sectarian divides abide, paid for with his constituents' taxes.

As he told the Commons last month, "find the savings from those things and invest in a better future for everyone."

It's clear that Westminster wants action on "our shared society" before it will hand fiscal powers to Stormont.

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