Brown to make final power sharing cash offer

British Chancellor of the Exchequer Gordon Brown will reveal today his final offer of a financial package to politicians in the North to bolster the return of devolved government.

The multi-billion pound package is seen as being critical to hopes that power sharing will return at Stormont by next Monday.

Northern Secretary Peter Hain was engaged last night in intensive discussions with the Democratic Unionists and Sinn Féin, who will be the leading two parties in a future devolved government.

But British government officials have been warning business leaders and politicians in the North against expecting a significant advance on the offer of £50bn (€74bn) over 10 years made by the Chancellor last October.

Democratic Unionist leader Ian Paisley has warned his party will not go into a power-sharing Executive with Sinn Féin unless it has the financial capacity to address key socio-economic challenges facing a new devolved government.

In their discussions with Mr Hain, Mr Brown’s officials and British Prime Minister Tony Blair yesterday, the DUP also insisted they needed more clarity from Sinn Féin about its attitude to the Police Service of Northern Ireland before they could be satisfied that the conditions were right for them to form a new devolved government.

Mr Blair stressed at his meeting with the DUP yesterday that the government was firmly committed to the March 26 deadline for devolution and was not prepared to introduce emergency legislation to push back the date for power sharing.

Unionists and nationalists will be looking to Mr Brown today to give them assurances that they will be able to prevent controversial water charges from being introduced on April 1 if they revive devolution next week.

DUP sources were not happy at suggestions that Brown’s package would enable them to only defer the charges for a year and were keen to break the link between the charges and the raising of revenue for borrowing from the treasury to pay for infrastructural projects in the North.

Business and political leaders were pessimistic last night about their prospects of persuading the chancellor to lower Corporation Tax levels in the North to 12.5% – bringing it in line with the Republic's.

In his budget yesterday, Mr Brown cut Corporation Tax in the UK from 30% to 28% but it was thought he was unlikely to make a special case for the North in the face of likely opposition in other parts of the UK and ahead of Scottish and Welsh elections.

There was speculation Brown may propose a commission to look into the taxation issue.

Sinn Féin has been arguing for tax varying powers for the new Assembly.

Brown confirmed yesterday during the budget that he would propose in the economic package for the North a new innovation fund to help create jobs.