Decision on Corporation Tax welcome
08 April 2013
Statement by TUV Leader Jim Allister:-
“While the First Ministers would have us believe their failure to get corporation tax transferred to Stormont is a step backwards the reality is that it is the best decision for Northern Ireland. While the vested interest of big business rests solely in reducing their tax bill the corresponding haemorrhage from the block grant which every one in Northern Ireland would suffer through a cut in public services needs to be considered.
“The recommendation by the Silk Commission in November last year that corporation tax should not be devolved to the Welsh Assembly should act as a warning to Northern Ireland.
“In the report the Commission was unambiguous: “We have not recommended that corporation tax be devolved, as the costs would outweigh the benefits”
“The report went on to highlight a number of key issues which are repeatedly ignored by the cheerleaders for devolving the powers to Northern Ireland.
“The Welsh Government told the Commission: “Devolution of corporation tax could offer the Welsh Government a powerful tool to promote economic development, but this is a volatile tax which is strongly linked to the economic cycle. There would therefore be significant budgetary risks to Wales that would need to be mitigated in any proposal for devolution”.
“The Silk Commission also notes that because of the Azores judgment in the European Court there are significant risks to the Welsh budget. Additionally, the report notes a point which should resonate with all Unionists: “Many have noted to us that having a single corporation tax system makes the United Kingdom an attractive destination for international investment. This would be put at risk by having different systems in different parts of the United Kingdom. This point was made strongly to us by CBI Wales and True Wales who argued that inward investors placed great importance on a stable and predictable business environment and that corporation tax rates play a key part in this. It is therefore not clear that devolving corporation tax to the Welsh Government would necessarily be a useful policy lever.”
“There is a negative side of devolving corporation tax and the very substantial risks involved which have been too long ignored by the media and the political establishment in Stormont.
"For years Stormont has wasted its energies in chasing this moonbeam. In a gross miscalculation they pursued no other economic approach and now it's back to the drawing board."
