Belfast Telegraph

US investment conference shelved due to impasse at Stormont

By Liam Clarke and Noel McAdam

A major investment conference sponsored by the US Government has had to be delayed - and may possibly be cancelled permanently - because of doubts over Stormont's budget.

A US source told the Belfast Telegraph: "This isn't being used as an ultimatum but there is clearly no point in have this conference until we know what the rate of corporation tax is likely to be."

The last Government pledged to devolve corporation tax powers to Northern Ireland in the wake of the Stormont House deal.

That legislation was passed in the last parliament. but powers will not be handed over until the Chancellor triggers a clause.

The Government has made clear this will only happen when Stormont is on a firm financial footing.

After the Assembly failed to pass welfare reforms this week, the budget will not balance. As a result the British Government will deduct money it considers Stormont to have overspent from its block grant and withhold low interest loans.

The US ambassadors in London and Dublin - Matthew Barzun and Kevin O'Malley - have recently been over here to see the problems at first-hand.

The Executive parties see a reduction in corporation tax levels as the key to revitalising Northern Ireland's economy and attracting North American investment.

News the US investment conference may not now happen will increase pressure for a deal on welfare.

However, plans to bring a budget before the Assembly have stalled. The so-called second Budget Bill had been due to be placed before MLAs next Tuesday week, but Finance Minister Arlene Foster said yesterday she will not now do so.

"There is no budget to bring forward," a senior DUP source said.

Instead, Mrs Foster is now seeking urgent talks early next week with Treasury officials in London to discuss potential options.

Mrs Foster has warned there is an "unsustainable" deficit in the budget of £600m with health, education, policing, transport and other areas facing "swingeing" cuts.

MLAs have been told departments will run out of money towards the end of July, after which emergency measures - with a senior civil servant in control of budgets - would kick in.

The Finance Minister's agenda at the Treasury will also likely include how European Union farm payments can continue to be made across the province.

Under governmental rules, EU monies cannot be spent if a senior civil servant, the permanent secretary of the Department of Finance, takes over control of departmental budgets. But Sinn Fein Agriculture Minister Michelle O'Neill has insisted farmers' subsidy payments are safe.

The gathering crisis deepened after Sinn Fein yesterday told Secretary of State Theresa Villiers it will not accept unelected civil servants setting budgets for departments.

Ms O'Neill and Deputy First Minister Martin McGuinness yesterday met Mrs Villiers, who has warned Westminster must now consider taking over control of welfare, although as a "last resort".

Mr McGuinness said: "I made it clear to Theresa Villiers that any effort by the British Government to take back welfare powers would be a mistake and would be unacceptable to Sinn Fein.

"We had a very frank and forthright meeting and I told her this is the direct consequence of Tory austerity cuts."

The budget was also discussed at the regular fortnightly Executive meeting yesterday but no decisions on it were taken.

Belfast Telegraph