Belfast Telegraph

Northern Ireland economy has been let down by politics, claims business group

Grow NI believes progress is undermined, but CBI boss says power-sharing can work

By Margaret Canning

Northern Ireland's economic progress and its efforts to recover from the Troubles have been put in danger by a lack of political stability, it's been claimed.

Sinn Fein failed to nominate a successor to Martin McGuinness as Deputy First Minister yesterday, resulting in Secretary of State James Brokenshire calling a fresh election for March 2.

However, business group Grow NI - first set up to campaign for a lower rate of corporate tax in Northern Ireland - said it would continue to focus on economic growth and job creation despite the turmoil.

Mervyn McCall from Grow NI said the economy was under threat from the political crisis - and that politicians have failed to show the necessary qualities for progress in society.

"The critical need to demonstrate both internally but also internationally that our society is fully committed to tolerance, equality and justice, and good governance has sadly been lacking on occasions," he said.

Meanwhile, Angela McGowan, in her first newspaper interview as CBI NI regional director, called on the parties to pull together in the interests of a shared future.

She said resolving to get on with devolution "should not be a difficult decision".

She added that the Executive also deserved credit for its efforts.

"It must be given credit for paving the way for peace on our streets and I am convinced that it can work if our politicians demonstrate mutual tolerance, respect and comprise," she said.

As the snap election was announced, Northern Ireland's low corporation tax plan appeared to come under more pressure than ever following indications that the UK could adapt tax haven status after it leaves the EU.

Indications are growing that the UK will seek a hard Brexit with Prime Minister Theresa May to make a key speech outlining her plans today.

In an interview with a German newspaper at the weekend, Chancellor Philip Hammond signalled ministers could slash corporation tax rates if British exporters were faced with new tariff barriers.

He said he preferred for Britain to remain in the "mainstream" of economic thinking, but was then asked by Welt am Sonntag if post-EU Britain would become a tax haven.

The Chancellor said: "But if we are forced to be something different, then we will have to become something different."

However, a Grow NI spokesman said Northern Ireland's bid to have a 12.5% rate - due to be introduced next year - "still makes us very attractive as it will be based on the UK tax rules".

"While the UK main rate may go down over time, there are no specifics yet and if changes do come about they would take some time. There is no timetable yet for further UK reductions," he said.

"The lower the UK rate then the less expensive it is for Northern Ireland to set a lower rate. Even if the UK rate were to fall to say 15%, then Northern Ireland would have the power to go below 12.5% and the cost would still be affordable."

Mark O'Connell, the head of inward investment advisers OCO Global, said he believed Mr Hammond was laying the ground for the Prime Minister's speech on Brexit today, adding nothing new to earlier indications that the UK would reduce corporation tax to 15%.

That would "steal the thunder" of 12.5% in Northern Ireland - and Mr O'Connell was not optimistic that politicians could come up with other clever solutions.

"A deal with Dublin to try to relieve some of their likely 'post-Brexit' exodus dividend would be inspired, but I am not filled with confidence by our political leadership at the moment to propose/organise something like this," he said.

Meanwhile, the Government has published its response to a NI Affairs Committee report on Brexit, in which it said it understands that the referendum result "will have considerable implications" for people here. "The coming months and years will inevitably contain challenges. But whatever side of the referendum debate people were on, now is the time to build bridges. The UK is a strong country with a bright future and Northern Ireland will play a huge part in that," it said.

Belfast Telegraph