Belfast Telegraph

Economic realities of Stormont logjam hit home

Editor's Viewpoint

Many people are aware that the absence of a local budget will have serious consequences if the Stormont Assembly is not restored effectively within the near future.

Now it has been revealed that the absence of a devolved administration will endanger one of the key elements in our drive for inward investment.

This is the policy of lowering corporation tax to 12.5%.

It has the backing of the DUP, Sinn Fein and other parties, as well as Invest NI.

The measure will increase inward investment and make Northern Ireland more competitive.

The drive was supported by Liam Neeson, whose celebrity status helped to make the right kind of headlines at home and abroad.

Those backing the campaign were aware that a reduction in corporation tax would have to be offset by a cut in the block grant from Westminster.

They were also aware that even with reduced corporation tax, Northern Ireland would have to compete with Britain, which is also considering a lowering of the business tax rate.

Despite these potential drawbacks, the politicians and investment professionals here still felt that a reduction in corporation tax was well worth pursuing. Now these plans have been put on hold because the Department of Finance says that Northern Ireland is not in a position to go ahead with them until a devolved administration is up and running.

The department has delivered the bad news as tactfully as possible by announcing the target date of April 2018 for the devolving of corporation tax lowering powers "may now slip".

Invest NI has put as brave a face on this as possible by stating that it will continue to promote the commitment to a reduced rate, but in real terms it will have to accept the current reality that the tax cannot and will not be reduced until Stormont can show that "its finances are on a sustainable footing for the long-term".

This is that stark reality behind the current lack of a deal between the political parties, and until they find a way to some agreement the economic consequences could be serious, as they already are for those people running health, education and other important matters affecting all the people of the province.

The time is past for political posturing and to start governing Northern Ireland, which is why people gave Stormont its mandate in the recent election.

Those involved in talks must take this to heart.

Belfast Telegraph


From Belfast Telegraph