Belfast Telegraph

Stormont incapable of handling corporation tax power, says Allister

By Noel McAdam

A future Stormont Executive should not be given control over corporation tax because it cannot deal with power, the leader of the TUV has claimed.

Jim Allister said: "The very fact that this election is taking place is testament to the fact that Stormont cannot handle the powers it already has - never mind thinking about getting additional powers."

His comments came after plans for the devolution of corporation tax, which has been described as key to Northern Ireland's future economic growth, were thrown into doubt by the Executive's collapse.

A reduction in the levy from 20% to 12.5% is planned for April 2018, and forms part of the now 18-month-old Fresh Start Agreement between the DUP and Sinn Fein.

But the Assembly has to formally pass the rate, on a recommendation by the Finance Minister, this year before the handover of powers is given the green light.

Before that, the Executive has to have demonstrated to the Treasury that its finances are on a stable footing.

With the current failure to set a budget - and increasing likelihood of emergency measures being necessary on the far side of the election - the Executive could fall short on that test.

The potential fall-out from the botched Renewable Heat Incentive Scheme - now subject to a public inquiry after the March 2 election - could also further underline an impression of fiscal instability.

At the same time, the main UK rate of corporation tax could be cut in the near future, reducing the benefit to Northern Ireland of a 12.5% rate to match that of the Irish Republic.

Mr Allister said: "The TUV went into the last election arguing against the devolution of corporation tax. We will be making the same case in this election.

"When you are giving people £160 for every £100 of wood pellets they burn, it does call your ability to manage taxation powers into question.

"Any cut to the level of corporation tax in Northern Ireland will see a corresponding cut in the block grant of hundreds of millions per annum.

"This could be of the order of £350-£400m per annum. That is something we simply cannot afford."

Finance Minister Mairtin O Muilleoir previously accused former Chancellor George Osborne of driving a "horse and carriage" through Stormont's corporation tax cut plans after he pointed to the introduction of a UK-wide rate of below 15%.

However, a spokesman for the Department of Finance said yesterday: "The Department of Finance continues to work with other departments and with the British Government toward the introduction of a reduced corporation tax rate of 12.5% in April 2018, as per the commitment contained in the Fresh Start Agreement."

Belfast Telegraph


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