No cut in North's corporation tax rate 'for at least four years'

Any future cut to the corporation tax rate in the North will have to wait for at least four years, Stormont’s finance minister has indicated.

Sammy Wilson told MLAs he did not believe a reduction in the business levy, if it was made, would be implemented in the lifetime of the current Assembly.

The power-sharing administration is currently awaiting a British Treasury decision on whether the power to set the rate will be devolved to Stormont.

The North’s political leaders have lobbied for the move, claiming it would provide a vital kick-start to the region’s faltering economy and enable it to compete more effectively with the Republic, where the 12.5% rate is less than half the present 26% UK rate.

A public consultation exercise conducted by the British Treasury received more than 700 responses from interested parties.

While business leaders have backed lowering the rate, claiming it would generate 4,500 new jobs a year, others, including unions, are opposed as it could only be delivered with an estimated accompanying £400m (€459.76m) cut to public funding.

Mr Wilson said if the power was devolved a lot of hard negotiations with the Treasury lay ahead in order to determine the cost to the public purse in Northern Ireland.

“I have been to the forefront in saying that we cannot accept the devolution of corporation tax if it’s going to have a massive impact on our current spending – one of the reasons I believe there has to be very hard negotiations with the Treasury over the autumn to make sure we are not getting a bill which is totally unsustainable for the devolution of corporation tax,” he said.

“There has been no provision made in the current four-year budget for the devolution of corporation tax so even if we got it down to say a figure that is manageable there would still be an impact, unless of course it is phased in or deferred.

“Because many people argue that it’s just the certainty that the tax rate will be down to a certain level by a certain time which will influence investment decisions, and since there is a long lead-in for investment decisions, I don’t believe that we are going to see a reduction in the rate of corporation tax within the lifetime of this assembly – it will be after that.”