Cutting corporation tax is crucial to shaping economy
Boosting firms' profits holds the key to a prosperous Northern Ireland, says Owen Paterson
Last month in Chicago, I talked to Mayor Richard Daly and Paul O'Connor, the former executive director of World Business Chicago, who between them helped buck the trend of US cities in economic decline to make Chicago a beacon for business.
It was the city's dynamic and comprehensive business-friendly environment that got Boeing to locate its world headquarters in Chicago; that was only the beginning.
There are clear lessons for us here as we set about rebalancing the economy and turning Northern Ireland into one of the best places to do business in Europe.
Northern Ireland already has a huge amount going for it as a business location. We also have a number of world class businesses; our problem is that we just do not have enough of them.
For reasons we all understand, our economy is too reliant on the public sector. According to one survey, 77.6% of GDP depends on public spending. That is not sustainable in the long term.
I have spoken to many hundreds of businesspeople over nearly four years. Two issues have come up time and again: planning and corporation tax. Planning is a matter for the Assembly and I am pleased that the last Executive began to take steps to tackle this.
Yet I became convinced that lowering the rate of corporation tax here would be the major catalyst to reviving the private sector.
George Osborne has already announced reductions to the main and small business rates of UK corporation tax. Yet given our need to boost the private sector I believe we need to go further.
So at the last election we committed to producing a detailed paper looking at how Northern Ireland might be given a different rate of corporation tax to the rest of the UK.
It became a key coalition Government pledge for Northern Ireland. Last month we delivered our promise and launched a consultation on the paper.
At the launch, I stood alongside Treasury Minister David Gauke, all the leaders of the Executive parties and a host of successful people from the business world. We were all agreed that giving the power to set the rate of corporation tax to the Executive would be a huge boost to the Northern Ireland economy.
To have come this far is itself a very significant achievement. This time last year, virtually no one thought this was a realistic prospect. That is because the previous Labour government had killed it stone dead with the Varney review.
Yet our paper is only the start; we now need to deliver. Businessmen and women, civic leaders and, indeed, newspapers have to tell the Chancellor what they have been telling me for years: that this is an idea whose time has come.
That is why yesterday I met the Northern Ireland Business Alliance, a coalition of all the business organisations from across Northern Ireland. They are hugely enthused by this and are determined to make it work. Reducing the tax on companies' trading profits can benefit everyone. Local businesses would have more money to invest and grow, boosting employment.
It would help attract foreign direct investment bringing jobs and helping local suppliers. As the economy grows, more money will be generated for better public services.
Increasing prosperity would flow into every corner of Northern Ireland, bringing wider social benefits across the community. It would help to shrink the size of the pool from which some paramilitary groups still try to recruit.
So corporation tax is a key part of a broader plan for a peaceful, stable and prosperous Northern Ireland.
Both the Government and the Executive have significant powers to develop the economy; working together we can turn Northern Ireland around. So let us grab this chance.
The consultation on corporation tax runs up to June 24. I urge everyone to respond positively to the consultation document sending a crystal-clear message: we want this to happen.