Arlene Foster: Corporation tax cut certain to happen in April 2018

Arlene Foster has delivered a categorical promise to businesses that corporation tax will be cut to 12.5% in 2018.

Saturday, 29th October 2016, 7:33 am
Updated Monday, 31st October 2016, 9:54 am
The Executive will have to pay the Exchequer the differential between the NI and UK corporation tax rate

Earlier this year, Sinn Fein had sounded cautious notes about whether the plan would be affordable.

But, when asked if corporation tax will be cut in April 2018, Mrs Foster answered with one word: “Yes.”

Pressed on whether that was absolutely certain, she added: “Yes. Of course, we’re waiting to see what the national government does in relation to corporation tax because there’s been a bit of to-ing and fro-ing; obviously when Philip Hammond came in the George Osborne [proposal] of going below where they’d planned to go seemed to have disappeared for a while but has come back onto the agenda as late as last weekend.”

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When asked if the tax will be cut in Northern Ireland irrespective of the decisions of the UK Government on the UK-wide rate, Mrs Foster said: “Oh yeah. Well as far as we’re concerned, it’s in the agenda now. Of course we have to, in order to make it happen, take some steps as well in terms of financial sustainability and I think it is key that we deliver on those commitments because it’s not just the Government that has to devolve it to us; we have things to do as well.”

Mrs Foster said that the Executive was now considering how it will pay for the policy. She stressed that the cost of the decision would “largely depend” on where the UK corporation tax rate is set, as Stormont will have to pay the differential between its rate and the UK rate.

Pressed on whether the Executive – which says it will deliver £1 billion additional funding to the NHS over the next five years, as well as cutting corporation tax – will raise rates or borrow more money to pay for those commitments, Mrs Foster said: “Well, we’re having discussions at the moment, it will not surprise you, around the Executive table, as to how we achieve our manifesto commitments that we both put out there ... we said that we want to spend that billion pounds on health; we want to see education become more efficient and delivering for every child; we want to see infrastructure investments...”