Corporation tax decision reaching D-day: Owen Paterson
Northern Ireland's political leaders must secure corporation tax within days or the "once in a generation" chance could run out of time, former Secretary of State Owen Paterson has warned.
Devolving corporation tax to the Executive would be as beneficial to the province as the Good Friday Agreement, the Conservative MP told business leaders in Belfast yesterday. He said: "This would be the coalition government's equivalent to the Agreement. It would be that beneficial long term."
In his Autumn Statement last week, the Chancellor, George Osborne, said the devolution of corporation tax is conditional on the Stormont parties being able to deal with the financial implications of cutting the tax, and the success of the current talks process.
This has linked the devolving of powers with the toxic issue of welfare reform. Fears are building in the business community that politicians will stonewall the progress of the long running issue of corporation tax just as it appeared to finally be within reach.
Speaking to the Belfast Telegraph during an event at accountancy firm Grant Thornton, Mr Paterson urged the political parties to sort the issue as soon as possible. "It really would be good to get it sorted this week. Every day jeopardises its chances," he said.
Mr Paterson highlighted that the proposed bill is already drafted, and just needed agreement from the Executive, as far as he understood. But it's feared the current political stalemate here could put an end to the business tax powers being handed over to Stormont. Mr Paterson warned there may not be as much time as people think to get the bill through parliament, once agreement is met.
"Parliament stops in March, if you take in the Christmas recess, there is a February recess, so there is not a huge amount of time. This window is very briefly going to be open. This is a serious bill, which will have to be given parliamentary time in its own right."
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Mr Paterson described the chance to grasp devolution of corporation tax as "a once in a generation" moment. If these latest talks fail to solve the issue, it may not appear on the national agenda for a long time, he said.
If the business community wants corporation tax powers, it must show politicians how important it is, he added.
Economist Paul Mac Flynn, from the Nevin Economic Research Institute, warned however: "The current debate surrounding corporation tax is distracting from the long-term investment and capacity building needed in key growth sectors of the economy.
"Northern Ireland has, for many years, struggled to close the gap in productivity with the rest of the UK.
"In order to meet this challenge, the state must take an active role in boosting innovation in the economy and commit to it financially."