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Outlook on business tax good... but breakthrough in talks still in balance

By David Young

While Scotland looks set to miss out on gaining corporation tax powers, Northern Ireland may yet land that responsibility, with a decision by the Treasury imminent.

Scotland's First Minister Nicola Sturgeon said she would welcome Northern Ireland getting the powers but at the same time would question why Scotland was not granted them.

"In the case of Northern Ireland and the hope an announcement on corporation tax is forthcoming very soon, I hope very much that is the case," she said at yesterday's British-Irish Council (BIC) meeting in the Isle of Man.

"It was and certainly is a power we have argued in the past should be devolved to the Scottish Parliament but, nevertheless, let's see what happens."

The Government has previously claimed that Northern Ireland was a special case in regard to corporation tax because it shared a land border, and was therefore in direct competition with, the Republic where business taxes are significantly lower.

Ms Villiers said yesterday: "I think there is broad recognition that the devolution settlements need not be identical in different parts of the UK."

The BIC meeting focused on issues such as the economy and digital inclusion.

Meanwhile, the Stormont Executive has witnessed a positive turning point, the Northern Ireland Secretary has said.

Theresa Villiers' relatively optimistic assessment on the state of negotiations comes only days after she issued a blunt statement rating the chances of agreement as "slim".

She said a re-intensification of effort by the Executive's five parties over the last week had made her reappraise her bleak prediction.

Her comments came as Taoiseach Enda Kenny said he and Prime Minister David Cameron intended to travel to Northern Ireland as the talks intensified ahead of an effective Christmas deadline.

Ms Villiers and Irish Foreign Affairs Minister Charlie Flanagan yesterday reported back to Mr Cameron and Mr Kenny respectively on progress two months into the process.

Mr Kenny said the report filed by Mr Flanagan was "very optimistic that progress still can be made".

"I have to say his report indicates that the parties in Northern Ireland have been very positively disposed towards, first of all, the talks and, secondly, making progress in respect of three difficult issues - flags, the past and parades," he said.

Mr Kenny added: "From our point of view we want to encourage, to support, to assist in any way as a co guarantor of the Good Friday Agreement and reports to date are of a positive disposition - progress is being made." As Ms Villiers struck a more positive note, Stormont sources suggested a degree of progress might be possible, particularly on the issues of the past and on Executive structures.

She said: "I think it was genuinely a turning point this week, I think the parties were very clear that they wanted this process to succeed.

"I think the engagement over the last few days is more serious, more business-like, more focused than actually has been the case up to date."

She added: "I think a realistic assessment is we still have a way to go, we still have very significant differences between the parties and, on balance, I would be by no means confident of a successful outcome."

However, Ms Villiers said without a breakthrough on welfare reform a wider agreement would be "impossible".

Deputy First Minister Martin McGuinness said failure in the talks "isn't an option" while Simon Hamilton said: "I don't think anybody doubts the difficulties the parties in Northern Ireland face in trying to reach agreement but my party called for these talks, we have been involved intensely in these talks - we are in the business of making progress."

Scotland corporation tax row as Stormont expected to be granted power to vary rate soon 

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