Corporation tax cuts are 'the only way to growth'
REDUCING the burden of Corporation tax is the only realistic way to turn around the economy of the Province, the Northern Ireland Economic Reform Group said yesterday.
In its first report, the group, comprising senior business figures and accountants said that 12 years after the Good Friday Agreement, the region remained the poorest in the UK and claimed that a cut could create 90,000 jobs over the next 20 years.
Stating that the Province had suffered the largest percentage loss of jobs in the recession, it said subsidies paid to Northern Ireland amount to around 9bn every year or 5,000 for every person.
Describing the local economy as “stuck in a rut,” it said had happened despite the highest levels of government support for business in any UK region.
The report is the work of a panel which includes Bombardier-Shorts Chairman Sir George Quigley, University of Ulster economist Michael Smyth and Graham Gudgin of the Centre for Business Research at the University of Cambridge.
They argue that, as well as giving the region an important opportunity to grow and in particular encourage foreign investment, the move to cut Corporation tax would be a cheaper option for the Westminster Government.
The panel goes further to warn that the situation could well get worse once EU laws limiting the payment of grants to private firms seeking to invest come into force.
The report is the group’s response to the Varney Report which dismissed the idea of cutting the tax in isolation for the Province two years ago.
However, the Conservatives are more attracted to the idea than Labour as Shadow Secretary of State for Northern Ireland, Owen Paterson made clear yesterday.
“The Conservative Party has been saying for some time that a radical, long-term strategy is required to end Northern Ireland’s dependence on the public sector and to boost private sector investment.
“That’s why Conservatives and Unionists are currently looking at ways in which we could turn Northern Ireland into an enterprise zone should we win the election.”
Alliance Party Finance Spokesperson Stephen Farry MLA said: “Economists have recognised that this would make the single biggest difference in creating a step change in levels of local economic activity. While the UK Treasury has so far rebuffed efforts, the campaign should nevertheless continue.”
NIIRTA Chief Executive Glyn Roberts said: “There is no doubt that more FDI for Northern Ireland as a result of a lower Corporation Tax rate would be a win-win for both creating new jobs and the knock on effect this would have in our indigenous small businesses.”
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Tuesday 14 February 2012
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