Belfast Telegraph

A new era for business... if politicians can move forward

By John Simpson

The confirmation that a cut in corporation tax levied on trading activities by businesses in Northern Ireland will become effective from April 2018 will be generally welcomed by business owners across Northern Ireland.

Now there is certainty about the date of implementation for the change and on the rate to be charged: 12.5%.

In three years' time, Northern Ireland businesses will be on a level playing field with others in the Republic of Ireland.

The announcement has been longer in planning than was at first hoped but, as Invest NI now says, a firm decision can be taken into account by managers considering the merits of investment plans in the years ahead. Game-changer is the key phrase that is now being used.

Critically, the change in company tax rate on its own, whilst welcome, will not be all that is necessary to be a game-changer.

Invest NI points to its ability to use the new rates as leverage for businesses where decisions will be profit sensitive.

Part of the advanced package of business advantages that can make Northern Ireland a constructive competitor with firms in other parts of Europe includes the net impact of our costs and our levels of taxation.

The new comparative advantage does not stand alone. The complete range of business costs and taxes are important, and the stronger the case that local costs are competitive, then the more effective the relative company taxation rates will be.

Already, Northern Ireland can usually point to competitive earnings levels for people with necessary skills.

Alongside that strength, there is a need to build better preparedness with people gaining new skills, offering proven qualifications and demonstrating adaptability to modern techniques.

Also, the availability and competitive cost of office and factory property will enter the equation.

In support, careful choice of priorities in improving the infrastructure and delivery of public services now merits a substantial review.

Not least, in building a successful profitable investment prospectus, assurance on steps to minimise energy costs must remain on the agenda.

Northern Ireland now has a better opportunity to offer a stable business environment, improving productivity, managing costs efficiently and, now on top, lower company taxation.

For the ministers charged with improving the management of the economy, the critical challenge is that the cost of implementing reduced company taxation should be resourced with minimal impact on critical aspects of the Stormont budget. That choice remains to be made.

Most critical of all, if these changes are to be effective, the Stormont House Agreement must stick firm and rock solid.

Belfast Telegraph