Tax cut hopes if Tories win
A Conservative win at the general election will open up the possibility of a major cut in business tax in Northern Ireland
Wednesday March 10 2010
A Conservative win at the general election will open up the possibility of a major cut in business tax in Northern Ireland, a panel of senior economists have said.
A hung parliament may even soften Labour's attitude to a reduction in corporation tax given its potential coalition partners, the Liberal Democrats, are also sympathetic to the proposal, the Northern Ireland Economic Reform Group (ergNI) told Assembly members.
Chancellor Alistair Darling has so far rejected calls from Stormont politicians to reduce the local levy from the UK-wide rate of 28% to the 12.5% that is currently in operation in the Republic of Ireland.
The group is a strong advocate of the move, claiming the investment it will attract will make the region less reliant on Westminster subsidies and create more than 90,000 extra jobs in the next two decades.
Representatives from the group urged members of the Finance Committee to keep pressing the Treasury to hand Stormont the powers to set its own rate.
"If the members of this legislative house asked for this, there is no prevention for doing that," said ergNI member Eamonn Donaghy, who is head of tax at accountancy firm KPMG.
"Yes, I think Treasury is going to be a very difficult obstacle to move but ultimately the Treasury are subject to the political will of the people incumbent in power.
"So a change in government and a formal request from the Assembly in Northern Ireland I would have thought would certainly put a significant amount of pressure on the Treasury to change their minds.
"And certainly the Conservatives have been making a lot of noise that this is something that they would consider doing and, bowing to the reality of a hung parliament, you may find that the Labour Party may take a different view as well.
"I rather suspect it will be a difficult mountain to climb but now is an interesting time to be having this debate."
