Business leaders claim tax cut in North will boost the economy here
Westminster may devolve more powers to Stormont
PROPOSED new measures to boost the Northern Ireland economy including a potential enterprise zone will have a positive spill-over for the Republic, business leaders claimed yesterday.
An "economic pact" between the North and Westminster is expected to be agreed before the end of the week as G8 leaders prepare for next week's global summit in Fermanagh.
The package is designed to boost the North's economy ahead of an expected decision next year on allowing corporation tax to be devolved to the Northern Ireland executive.
If it gets the go-ahead it could lead to the rate being lowered to ensure the six counties can better compete with the Republic for inward investment.
The package is also expected to include proposals for an enterprise zone and investment conference.
Business body IBEC said there are more positives for the island as a whole than the short-term competitive issues that may emerge from the North competing with the Republic.
"Yes, you will get people in that competition mode but ... by having a vibrant all-island business model, I think it is in everybody's interests north and south," said IBEC chief Danny McCoy.
"Those who react to it in a static way, to say it's bad for the south, are not watching the dynamic that this can bring to a society as is evident by the success of the Irish model over the last few decades.
"From my chair as the largest business organisation on the island, I see it as a very positive development if delivered on."
The recession experienced in Northern Ireland has been deeper and longer than other regions of the UK. It experienced a larger boom in property prices than other UK regions and is also heavily reliant on public spending from Westminster.
To mark the 15th anniversary of the signing of the Good Friday Agreement earlier this year, Northern Ireland Secretary Theresa Villiers said there needed to be a stronger private sector in the north.
"We're considering issues like how to make enterprise zones a more attractive option," Ms Villiers said.
"We're also looking at how to improve access to bank finance and how we can give the Executive further help in taking forward infrastructure projects.
"And the Executive is looking at developing economic and social measures, including work on a shared future."
It emerged earlier this week that the northern economy appears to be stabilising, with some sectors starting to grow again. The services sector posted its first rise in more than three years.
Mr McCoy said the attraction of having an all-island business model has spill-over effects for the South, even if the North reduces its corporation tax rate to compete with the Republic.
"Once you get people thinking about the island on either side, that's very good," he said.
"A progressive, positive island, North and South; there are huge spill over effects positively for both.
"Northern Ireland has had a positive spill-over from the southern success and more success for the North, the better for the south."