Autumn decision for corporation tax

Published Friday, 17 June 2011

A decision to devolve corporation tax powers to the Stormont Assembly will be made in the autumn, Chancellor George Osborne said on his first visit to Northern Ireland since taking office.

We’re sorry. This video is unavailable from your location.

Corporation tax
Analysis

Mr Osborne held talks with First Minister Peter Robinson and Deputy First Minister Martin McGuinness at Stormont Castle on the proposal to cut the business tax rate to match that of the Republic of Ireland.

All main political parties in the region, the business community and Secretary of State Owen Paterson have all championed reducing the rate to 12.5%, amid claims that it would bolster investment and create jobs.

A Treasury paper on lowering the rate of corporation tax is out for consultation until 1 July.

What does the Chancellor's visit mean? Put it like this. Would he and the Prime Minister come over and then say no to low corporation tax?
UTV's Business Editor Jamie Delargy on Twitter (@Jamie_UTV)

On Friday Mr Osborne said he came to Belfast in "listening mode".

"I wouldn't be here and we wouldn't have had a Treasury paper if we didn't think it was an idea worthy of very, very serious consideration," he said after meeting Mr Robinson and Mr McGuinness.

The tax cut would have to be accompanied by a proportionate reduction in the Northern Ireland's block grant, estimated at £385m a year.

The Chancellor revealed the exact cost of introducing corporation tax will be decided by an independent body.

"We have to make a decision as the UK Government whether it's the right thing for the UK economy to have a different corporation tax rate in one part of the United Kingdom", Mr Osborne told UTV.

"At the same time, people in Northern Ireland have got to make a decision about whether they are prepared to pay the price for getting in less tax because they believe it will bring more jobs and investment."

Mr Osborne said the Treasury would consider its final decision once the consultation ends next month.

"I think a reasonable period of time is to consider this over the summer and in the autumn give you our response, and that's what we intend to do," he said.

Mr Osborne described Friday's meeting as "a very good discussion".

"We all agree on one thing. We want the Northern Ireland economy to grow, we want Northern Ireland businesses to be successful and we want the people of Northern Ireland to have a brighter future," he said.

Mr Robinson and Mr McGuiness welcomed the opportunity to meet the Chancellor.

"We put very strongly the benefits that we see of setting the level of corporation tax in Northern Ireland, the disadvantages that we have been facing, the need to rebalance our economy and the benefits that can flow from it," Mr Robinson said.

Mr McGuinness said: "We welcome the opportunity of having a very wide-ranging discussion around a list of issues that are of concern to ourselves."

The Chancellor later visited the Wright Bus manufacturing firm in Ballymena, Co Antrim.

Comments

7 Comments

Charlie in Belfast wrote (341 days ago):

I am firmly of the opinion that some of our local Ministers and M.L.A's are " a stick short of a bundle " by giving consideration to a reduction in corporation tax. Assuming corporation tax will be reduced to 12.5% in order to bring us into line with the now virtually bankrupt Irish Republic at a cost of £385 million pounds to the Northern Ireland economy in my opinion is the height of stupidity. But with the Ministers and M.L.A's we now have sitting in Stormont I suppose nothing should surprise me anymore, it's little wonder that only 50% of the electrate bothered to vote at the last election.

Kieran Murphy in Dungiven wrote (341 days ago):

I would like to explore that theme of the 20,000 workers been employed in manufacturing in Northern Ireland to reduce the unemployment figures from near 60,000 20,000 workers at 4.50 a hour for one hour is 90,000 and multiply by a 8 hour is 720,000 stg and multiply by 5 working days 40 hour week is 3.6 million multiply that 52 weeks is approx 200 million for full year. Even these workers lost no tax would it no be a intresting route to explore and would not have to ask permission from the European Commission to do that . If there was drop in Corporation tax here and estimated cost over 300 million the rules are it would would have be reduced somewhere else in the economy here even with the British Government winning their case against the EC and Courts of Justice But it is true that NI could be a mecca for manufacturing on this simpe law of basic Economics that no other Area of EU could compare to to attract the Chinese, Countries of the Far East, even within the EU and in USA to employ ourselves alone . Margaret Thatcher once said Pennies do not come from Heaven they have to be earned here on Earth but Housing would need to be cheaper and more public Housing to be viable to

Joe Smith in belfast wrote (342 days ago):

This would have been a good opportunity for George Osborne to challenge Mr. MCGuinness about his denial of human rights to thousands of voters who have no voice in Westminster because he is not doing his job as MP for Mid Ulster. One appalling fact is that this has gone on unchallenged for 13 years. This abuse of human rights is also in breech of the Good Friday agreement which Sinn Fein signed up to.

Kieran Murphy in Dungiven wrote (342 days ago):

Even the Chancellor did agree to lowering Corporation tax it could well be a matter for the European Commission and Courts of Justice to decide as in effect there would two different tax regimes within the UK and if you ask the best way to get 20 thousand jobs into Northern Ireland is explain to the Chinese or Americans that we can provide them in manufacturing at 4.50 a hour the minimum wage in US that is 7.30 usd This way could get the Executives in major companies Worldwide intrested in stopped here

Kev in UK wrote (342 days ago):

By growth do they mean GDP or GDP per capita? It is the latter which is harder to achieve but is what improves peoples' lives.

More Comments

^ Top of Comments