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What it's all about: Key questions on a controversial issue

Q. So why all the fuss about corporation tax?

A. The Executive parties view control over corporation tax as a potential game-changer helping to attract well-paid jobs into Northern Ireland, building the private sector and boosting the economy.

Q. But hasn't this talk being going on for years?

A. 30 years, some would say. But it has been at the very centre of the political agenda for the last four years.

Q. What difference would having tax powers make?

A. Having the power to vary corporation tax would help us to compete with the Republic, which has a much lower business tax rate, in wooing global businesses.

Q. Why is the handover taking so long?

A. From 2011 the issue has become bogged down in hightly technical negotiations between Stormont's Finance Department and HM Treasury over the likely impact on our block grant from Westminster.

Q. And what does the block grant have to do with it?

A. Reductions to our annual block grant are the price we would pay for being given the responsibility in the first place.

Q. So how much money are we talking about?

A. Cast-iron figures in all of this are hard to come by, but figures produced by the Treasury estimate this would amount to a block grant reduction of £110m in year 1, £235m in year 2, £265m in years 3 and 4, and £270m in year 5 - based on a 1.5% reduction in the rate of corporation tax by Stormont. Here, the Department of Finance and Personnel has estimated that the block grant cut could be as high as £400m by year 5.

Q. .And this would be on top of spending cuts already being made here?

A. Yes, but although the Executive is set to be handed the powers in tomorrow's Autumn Statement by the Chancellor, it does not have to act on them immediately - and even if it does, it will be two years before the reduction takes effect.

Q. Why will the change not happen immediately?

A. Although George Osborne seems prepared to grant the powers, the Executive still has to take a decision to trigger them - and decide when any changes will happen. The precise timing is unclear.

Q. So how might Stormont bring in a tax cut?

A. The Executive could, for example, set its own rates for both large businesses and small businesses and lower them incrementally, as part of a three-to-five year plan.

Q. Is this the 'silver bullet' the parties think?

A. Their main priority is to get the power, the argument being that it will give the province an insurance policy it can wait to cash in on later.

Belfast Telegraph


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