Belfast Corporation tax move backed

Parliament Buildings Stormont
Parliament Buildings Stormont

Political leaders in Northern Ireland have united behind a call for the devolution of corporation tax from London to Belfast to help encourage more private investment.

The power-sharing administration at Stormont wants to reduce its rate, a levy on business profits, from the UK-wide 21% to match the 12.5% imposed on firms in the Republic of Ireland, which has among the lowest levels in Europe and is a competitor for foreign direct investment.

The move is likely to cost more than £200 million a year, which must come from the Assembly’s budget without subsidy from London, according to EU rules.

But business organisations such as the CBI have backed the change as a powerful incentive for economic growth and the creation of highly-skilled jobs.

The Treasury postponed its decision on whether to grant the powers until after the Scottish referendum amid calls for Scotland to be given similar responsibilities.

Recently Scottish First Minister Nicola Sturgeon insisted that if Northern Ireland received the powers, “then there is no argument that says it shouldn’t also be devolved to Scotland”.

Northern Ireland Secretary Theresa Villiers wants to reduce the reliance of the country on a large public sector funded by the block grant from London.

Talks were convened by Ms Villiers at Stormont last year to sort out enduring problems with political power-sharing, including the Northern Ireland Executive’s budget, welfare reform, flags, parades and the legacy of the Troubles.

The five largest parties in Northern Ireland reached a broad agreement on December 23, mainly on financial matters, with the Government promising to give Stormont an extra £2 billion in spending and borrowing power.

Ms Villiers has said the proposed devolution of corporation tax is a “momentous” change.