What had been sold to investors as a decision to slash corporation tax to 12.5 per cent in April 2018 is not a done deal, the new Finance Minister has warned.
In what is the latest in an emerging trend of senior Sinn Fein figures sounding less than certain that they will ultimately support a measure which is far from universally popular with their supporters, Máirtín Ó Muilleoir said that he would be “restarting” negotiations with the Treasury in London.
The comments – which are completely at variance with the DUP message that the cut will definitely happen in less than two years’ time – are all the more significant because they come at a time in which Sinn Fein and the DUP are going out of their way not to contradict each other about the Executive’s programme for government.
Mr Ó Muilleoir, the first Sinn Fein member ever to hold the post of Finance Minister, appeared before the finance scrutiny committee on Wednesday.
TUV leader Jim Allister asked the minister whether there was a Memorandum of Understanding (MoU) with the Treasury over how corporation tax will be devolved.
Mr Ó Muilleoir said that they were “restarting” and “rebooting” negotiations with the Treasury over the issue.
He highlighted the issue of ‘secondary benefits’ from cutting corporation tax – such as an increase in VAT receipts if the economy booms as a result of the cut – which he said the Treasury wish to keep, but he believes Stormont should share.
“So is there a memorandum of understanding; have we agreed how it’s going to go forward? Not a chance.”
Later in the hearing, the minister clarified that there is in fact an MoU but said that he was not party to it.
He said it was “unacceptable to me that the Treasury say that they would get the secondary benefits ... I don’t like to say no, but I think you can take it that that’s a no.”
Mr Ó Muilleoir said that if Stormont was to give in to the Treasury on the issue, then it would “give in to an austerity agenda which means nothing but pain for our people”.
Mr Allister put it to the minister: “So the public perception that this is a done deal is inaccurate?”
Mr Ó Muilleoir responded: “It hasn’t been my perception, Mr Allister.”
UUP MLA Philip Smith said: “Unfortunately not only is Máirtín Ó Muilleoir’s main new policy to borrow and spend, increasing the already crippling levels of debt for future generations, but now it appears he is backsliding on the crucial issue of a corporation tax reduction.”
But the trade union Unite welcomed what it described as Mr Ó Muilleoir’s “doubts” over the policy. It argued that cutting business taxes would be a mistake.