Cutting tax rate is our best best
Everyone, including Prime Minister David Cameron, accepts that Northern Ireland's public sector is too dominant in the local economy, accounting for more than 70% of GDP. And there is similar consensus that efforts must be made to rebalance the economy, creating a larger, more vibrant private sector.
It is at this point that agreement ceases. However, one potential stimulus continues to be regarded as the most effective way to bring economic growth. That is bringing corporation tax here from its top rate of 28% to around the 12.5% that is currently on offer in the Republic.
It has to be accepted that devolving power to the Executive to vary corporation tax rates is either a gamble or a golden opportunity. Supporters of the move will point to the success of the measure in the Republic which prompted many global organisations to set up their European headquarters there. There is every reason to believe it would be an equally attractive lure here, provided the global economy improves sufficiently for foreign businesses to start looking for investment destinations.
There are potential difficulties as well. It would be opposed by businesses in other regions of the UK who would fear companies relocating across the Irish Sea. Politically, the Government would come under pressure to introduce similar measures for depressed regions of Britain. And there would be an initial fall in revenue to Stormont immediately in the wake of any reduction in corporation tax as Westminster would not make up the shortfall.
However, the exceptional nature of the local economy demands exceptional measures to redress the imbalance. Gamble or not, until a more convincing measure or stimulus can be produced, corporation tax seems the best bet to spur economic growth here with the public sector staring at hard times. It is an idea whose time has come and it should be grasped.