Belfast Telegraph

Osborne 'in listening mode' on tax

A proposal to lower corporation tax rates in Northern Ireland is worth very serious consideration, the Chancellor has said as he pledged that a decision would be made in the autumn.

On his first visit to Belfast since taking office, George Osborne said he had received a very clear message from Stormont leaders that the move would help regenerate the region's economy.

Mr Osborne held talks with First Minister Peter Robinson and Deputy First Minister Martin McGuinness on the issue of devolving the power to set business rates to the power-sharing administration.

All main political parties in Northern Ireland and the business community have championed reducing the rate from 26% to something closer to the 12.5% in the Republic of Ireland, amid claims that it would generate 4,500 new jobs a year.

The proposal was identified as an option in a Treasury paper on kick-starting the region's economy which is currently out for public consultation. The Chancellor said he came to Belfast in "listening mode".

"I wouldn't be here and we wouldn't have had a Treasury paper if we didn't think it was an idea worthy of very, very serious consideration," he said inside Stormont Castle.

Mr Osborne said the Government would consider its final decision once the consultation ends next month. "I think a reasonable period of time is to consider this over the summer and in the autumn give you our response, and that's what we intend to do," he said.

The issue is not straightforward for the Stormont Executive as, while a cut in business tax may stimulate investment and create jobs, it would also be accompanied by a proportionate reduction in central funding from the Treasury of an estimated £385 million a year.

Unions are opposed to the move, claiming it would take money from frontline public services to line the pockets of big businesses. But the overwhelming political consensus at Stormont supports reducing the rate. Northern Ireland Secretary of State Owen Paterson is also a vocal advocate.

After a 45-minute meeting with Mr Robinson and Mr McGuinness, the Chancellor, who was accompanied by Mr Paterson, was scheduled to have talks with the leaders of the other main parties at Stormont before heading north to visit the Wright Bus manufacturing firm in Ballymena, Co Antrim.

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