Belfast Telegraph

Belfast Harbour Estate: Stormont planning £400m sell-off to pay for corporation tax

Exclusive: The harbour is home to Belfast City Airport, Harland & Wolff, the Odyssey and Titanic Belfast

By Rebecca Black

Politicians are discussing a proposal to sell off the most profitable area of Belfast for £400m in a bid to pay for corporation tax, it can be revealed.

And Prime Minister David Cameron is sympathetic to the idea, it is understood.

The Harbour Estate is home to many well-known Northern Ireland businesses, such as George Best Belfast City Airport, Harland & Wolff, Bombardier, the Odyssey, the Northern Ireland Science Park, Titanic Quarter and Titanic Belfast. Over 700 firms employing around 21,000 people are located within the estate.

The area was valued three years ago at £850m, but it is understood that a price tag of less than half that is being discussed at the ongoing Stormont talks.

Ulster Unionist leader Mike Nesbitt confirmed that the idea was proposed by his party, but the idea has been slammed by Ukip MLA David McNarry as "asset gambling".

Today is set to be a crunch day for the talks.

Secretary of State Theresa Villiers said a decision on the power to set corporation tax being devolved to Stormont is likely to be delayed unless there is deal this week in cross-party talks.

Last Friday Mr Cameron left early when it became clear the parties were not going to make an agreement.

Talks have been continuing this week on flags, parades, the past and welfare reform, and the British and Irish governments are due to take part today in what has been described as a key day for the process.

The current rate of corporation tax paid by businesses in Northern Ireland is 21%. However, the Executive wants to be able to match the tax rate in the Republic, which stands at 12.5%.

Reducing the Northern Ireland rate has been estimated to cost around £300m, which under EU rules must be matched by cutting the £10bn block grant we receive annually from the UK Treasury.

However, it's thought the proceeds from the sale of the Harbour Estate could protect the block grant by paying for the tax cut instead.

Mr Nesbitt explained that he envisaged the proceeds of the sale of the Harbour Estate being used solely to pay for the devolution of corporation tax.

"It has been mentioned at the talks, and certainly I am on record as saying if we were going to sell Belfast Harbour, we should ring-fence the proceeds to pay for corporation tax, because the harbour would be worth £400-500m," he told the Belfast Telegraph.

"People are estimating the first year of corporation tax could cost us £350m, so if you are going to have a period of 18-24 months where the overall take of corporation tax drops because we have lowered the rate and we don't have all the new companies fully operational, the sale of the harbour would be a pretty good fit in terms of covering that little hiatus."

The Ulster Unionist leader confirmed that his party had raised the proposal in talks with the Prime Minister.

He said Mr Cameron was "sympathetic to the argument".

But Ukip MLA Mr McNarry said the sale was "asset gambling", which worried him "when in the hands of amateurs".

He cautioned that there was no guarantee that lowering corporation tax will bring significant investment to Northern Ireland as it is intended to do.

"Corporation tax remains a gamble itself, which could turn into a busted flush," he argued.

He emphasised that he was not against selling off the Harbour Estate, but that he was concerned the Executive may "fritter away" the proceeds.

"My information is that urgent plans to sell the Belfast Harbour Estate are well in place and prepared to go to the Assembly for legislative approval in a rush job to please the London Treasury and inject hard cash into the Executive's empty kitty," he claimed.

Mr McNarry also queried whether the correct value had been placed on the Harbour Estate, and also whether it - legally - can be sold.

A spokeswoman for the Department for Regional Development said: "The minister (Danny Kennedy) remains open to considering proposals and options which could include the disposal of all or part of the Belfast Harbour estate.

"Any subsequent course of action in this respect would, of course, require Executive agreement."

Background

Earlier this month Chancellor George Osborne said the power to set the rate of corporation tax could be devolved to Northern Ireland provided the Executive can show that it is "able to manage the financial implications".

However, transfer of the tax-setting power will mean a reduction of £300m from the province's annual subsidy from Westminster.

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