Business leaders: Cut tax and help economy
A cut in corporation tax will enable Northern Ireland to rebalance its economy and “pay its way”, according to a letter to the Chancellor from leading figures in the business community.
Eight business organisations have presented a united front to tell George Osborne that allowing Northern Ireland to set a lower rate would be “the fastest way to rebalance and grow the Northern Ireland economy”.
The letter said: “Without this reform the Northern Ireland economy will continue to be untenable and over-dependent on taxpayers in Great Britain”.
They describe Northern Ireland as having the poorest economy in the UK, which they said will get worse because of public sector cuts.
“The indigenous private sector is too small to compensate [for cuts]. Our record of attracting overseas investment is poor compared to our nearest neighbours, the Republic of Ireland.
“Northern Ireland is crying out for a step change in how we attract inward investment and stimulate local entrepreneurship.”
The coalition is made up of CBI, Institute of Directors, Northern Ireland Chamber of Commerce, Centre for Competitiveness, Northern Ireland Independent Retail Trade Association, Construction Employers Federation, Northern Ireland Food and Drink Association and software industry body Momentum NI.
The group vows lower corporation tax would be a “game changer” for attracting investment but they added: “We recognise that it is not a panacea and should be supported with other |incentives such as research and |development and intellectual property tax breaks, as well as aligning our skills base with investors’ needs.
“In short, we need to be able to tailor the region's incentives to match the changing needs of investors and business.”
The coalition also said cites a claim by the Northern Ireland Economic Reform Group that reform would create around 90,000 jobs over 20 years paying above average salaries.
The business group said increased high tech foreign direct investment generated by lower corporation tax would increase productivity and improve salaries, leading to increased spending in the Northern Ireland economy.
They concluded: “We believe that reduced corporation tax is the fastest and best way to bring lasting, well paid jobs to Northern Ireland.
“We implore you to now take the necessary steps to introduce these powers for Northern Ireland so that we can begin to pay our way.”
The letter is the latest in a series of calls for Northern Ireland’s rate of corporation tax to be lowered to 12.5% in line with the Republic of Ireland.
Its rate remains one of the lowest in Europe compared to the main UK tax rate of 28% — despite continental neighbours insisting that the rate should be raised as a condition of the Republic’s access to a €85bn bailout from the IMF and EU, agreed by European ministers yesterday.
First Minister Peter Robinson has also spoken out in favour of cutting corporation tax. A Treasury paper on mechanisms that could be used to allow the Northern Ireland Executive to reduce corporation tax is due out by the end of the year.