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Business group vows to keep on battling for tax rate cut

A business group in favour of a cut in Northern Ireland's corporation tax has said it hasn't given up the fight despite apparent procrastination on a decision in London.

The CBI in Northern Ireland said it believed Prime Minister David Cameron and Chancellor George Osborne and not the Treasury would decide on whether the province should be allowed to set its own rate of company tax.

The pro-tax cut lobby believes a rate lower than the present 24% - and closer if not the same as the Republic's 12.5% - would attract foreign direct investors, creating 58,000 jobs and rebalancing the economy away from its public sector dependence. But cutting corporation tax will come at a cost to Northern Ireland's bloc grant, which the CBI estimates would lose £250m to £300m but opponents put as high as £500m.

CBI chairman Ian Coulter said he did not believe a decision would come from the Treasury, where civil servants are viewed by First Minister Peter Robinson as delaying a decision on a transfer of tax powers.

However, Mr Coulter said: "I don't think this is a Treasury decision but a George Osborne and David Cameron decision as to whether they want to rebalance the economy." He said he hoped to speak to the Chancellor at a CBI event in Scotland next week.

A decision by the Treasury has been postponed to the autumn after being expected in the summer. The department said on Friday it had no updates.

Mr Coulter said the March 2011 Treasury document Rebalancing the Economy should represent the whole of the Treasury's position and subsequent statements about the risks of 'profit-shifting,' the payment of a £105m indemnity and £50m administrative charge, should influence it.

He added: "Without it we will bump along the bottom with little growth. We will have difficulty from all angles: regionalisation of public sector pay and even possibility benefits, and our banking system will take years to recover".

However, Mr Coulter said: "I believe this still can be done because the argument is a strong one and we have got to push it."