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'Economically naive' Sinn Fein are slammed by the DUP


Chancellor George Osborne is planning to sell off more national assets

Chancellor George Osborne is planning to sell off more national assets

Chancellor George Osborne is planning to sell off more national assets

The DUP has accused Sinn Fein of "economic naivity" after the republican party questioned the devolution of corporation tax here, but also called for "full fiscal devolution".

"Whether Declan Kearney on corporation tax or Conor Murphy on Northern Ireland having full fiscal powers devolved, both utterances only serve to further weaken SF's credibility and expose their naivety on economics" said Peter Weir, the DUP whip.

Mr Kearney, the Sinn Fein general secretary, used an article in An Phoblacht, the party journal, to question whether we could afford the devolution of corporation tax in two years' time as promised. The measure, basically a cut in business profits tax, would cost us about £300m a year to implement and is seen by all Executive parties as the main means for rebalancing our economy and providing growth.

Cutting corporation tax is credited with stimulating the Republic's economic revival. Just last month a planned US investment conference here was cancelled because of uncertainty over the tax cuts. Legislation to devolve the power has already been passed at Westminster. However, earlier this week Secretary of State Theresa Villiers warned that the powers would not actually be handed over unless the Executive can balance its books.

Mr Kearney tackled her arguments head-on. "The scale of the next phase of British Government austerity measures becomes clearer - the North is at a serious political crossroads that could lead towards an economic cliff," he said.

"The stated intention of Chancellor George Osborne to proceed with a £25bn reduction in the overall British State's expenditure plan for the period 2015-2018 - and the recent declaration of £3bn in public expenditure cuts this year - means that an estimated £800m will also be lost to the local economy between now and 2018. This quantum - combined with the actual net cut of £1.5bn already applied to the Northern block grant - translates into an overall loss to the six counties economy of approximately £2.3bn, and largely within the 2014 to 2018 period."

He called this a "virtual economic tsunami" and argued "in these circumstances, the regional economy will not be able to afford the introduction of corporation tax even if a date and rate were to be agreed. Moreover, the level of cuts on track will also wipe out the financial assumptions upon which the local budget is predicated".

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He said the only way out of this was for the Government to step back from its austerity agenda, at least in so far as it affects us.

Later Mr Murphy went on the Nolan Show to defend him. He called for all fiscal powers to be devolved to Northern Ireland so that we could pay our own bills and raise our own taxes. The Department of Finance says this would produce a shortfall of £10bn a year, but Sinn Fein believes it might be only £3bn.

Mr Weir commented "the idea that Northern Ireland could leave the Union and assume full fiscal autonomy falls down when you understand that we depend on a £10bn subvention from Treasury every year to pay for our public services".

He added: "I want to see us paying our way. That's why we want to see business grow in Northern Ireland. That's why the DUP took a balanced approach at the Stormont House talks and made an agreement with the other parties which protected the vulnerable whilst the same time reforming Government and setting a foundation for growth in our economy."

He believed "the only reason there is dust being thrown in the air regarding corporation tax is because SF decisions, through southern influences, has landed us with a black hole in the budget".

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