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Northern Ireland to get new powers to set low corporation tax after House of Commons vote

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MPs voted yesterday to allow Stormont to set lower taxes to compete with the Republic

MPs voted yesterday to allow Stormont to set lower taxes to compete with the Republic

MPs voted yesterday to allow Stormont to set lower taxes to compete with the Republic

British MPs voted for legislation devolving the power to set corporation tax to the Northern Ireland government following a breakthrough in the political impasse over the North's budget.

The Corporation Tax (Northern Ireland) Bill will now go before the House of Lords but is certain to become law.

It grants Stormont the power to set the corporation tax rate over most trading profits and enables the Northern Ireland Executive to reduce the tax to be more in line with the Republic.

The bill was introduced at the beginning of the year after Stormont forged an agreement on December 23 following 11 weeks of discussions.

The agreement resolved destabilising wrangles over the administration's budget and its non-implementation of welfare reforms while establishing new structures to deal with the legacy of unsolved Troubles killings.

Speaking during the third reading debate in the Commons, treasury minister David Gauke said: "I believe this legislation is vital in allowing the Northern Ireland executive greater power to rebalance the economy towards a stronger private sector, boosting employment, growth and the standard of living.

"The unique challenges faced by Northern Ireland have been recognised by both sides of the House and I welcome the efficient and effective debate so far."

Shadow treasury minister Shabana Mahmood said Britain's Labour Party was committed to supporting the bill as a means of encouraging inward investment in Northern Ireland. She added: "We have all recognised that Northern Ireland has lagged behind the rest of the UK in terms of productivity and prosperity."

But Ms Mahmood stressed that this measure would not be the whole solution, saying it needed to be part of a much wider package.

The Government here has previously welcomed the Northern bill.

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