Business World

Sunday 25 March 2018

No decision on reduction of Northern Ireland corporation tax until 2014

THE UK government has made it "absolutely clear" that it will not make a decision on devolving corporation tax to Northern Ireland until after autumn 2014, the deputy first minister said today.

After talks with Prime Minister David Cameron at No 10 Martin McGuinness said the Coalition was unwilling to act until after the Scottish referendum.

First Minister Peter Robinson vowed to not to give up the fight for the power.

Speaking in Downing Street, both men told reporters they were "disappointed" with the outcome of today's meeting.

Mr McGuinness said: "It's very, very clear from the meeting that the whole issue of the referendum in Scotland is playing in big time to this debate on corporation tax and I think it is absolutely clear that no decision will be taken on this issue this side of the Scottish referendum. I think we have to face that reality."

The First and Deputy First Ministers have long campaigned for control of corporation tax to be devolved to Stormont so the levy can be reduced to 12.5pc to bring Northern Ireland in line with the Republic.

Mr Robinson said he had made it clear to Mr Cameron that he thought holding back on making a decision would be counter-productive to the campaign against Scottish independence.

"We can't understand that reasoning because we think it sends a message to the people of Scotland," he said. "What, effectively, you are saying to the people of Scotland is that if you want more fiscal autonomy than you have at the present time the only way to have it is through independence. I think that is the wrong message for the government to be giving to the people of Scotland."

He added: "There is absolutely no reason why a decision could not be taken today if there was the political will to take that decision today."

Mr McGuinness said the Treasury had always been resistant to handing control of the tax to Stormont

He added: "You all remember (former Northern Ireland Secretary) Owen Paterson. He came in like a knight in shining armour supporting this issue and left like a lamb. So I have to be concerned in the back of my head as to whether or not the Treasury are playing a more negative role than what they were playing two years ago."

Mr Robinson said the meeting had been adjourned rather than completed because a "number of other issues" required officials to meet in the next few weeks. The leaders will then meet again

A Downing Street spokeswoman said today's meeting had been "constructive" and had also included discussion about a "very good deal" on funding for the Assembly.

"They made good progress on setting out a timetable for a decision on corporation tax in the autumn of 2014," she added.

"If the decision is in favour of devolution we agreed to look at the best way of legislating within this parliament. Further discussion was agreed to take forward this process.

"The Prime Minister restated the Government's commitment to revitalising the Northern Ireland economy and outlined a wide-ranging package of options to help growth and tackle some of Northern Ireland's long-standing problems."

She added: "One of the issues discussed was making better use of European funding. The PM told the First and Deputy First Minister that, following his negotiation of a real-terms cut in the EU budget for the first time in history last month, we will still be able to give Northern Ireland a very good deal on structural funds.

"He has today written to the leaders of all three devolved administrations, telling them that we will be limiting the impact of cuts to structural funds to 5pc.

"For Northern Ireland, this should be compared against a cut of more than 40pc if the European Commission's formula had been followed. This is an uplift of €181m."

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