08 March 2002
Speaking exclusively to Public Finance, Farren revealed that he was in favour of the Northern Ireland Assembly acquiring a similar power to that of the Scottish Parliament to raise extra money by levying a higher rate of income tax. 'I think we should have it, potentially, though I don't know whether we would use it,' he said.
Farren, however, said that he was concerned that winning tax-raising powers could be at the expense of obtaining greater funding from the Treasury. 'The systems of devolution adopted in the UK are not systems that provide a great deal of fiscal autonomy,' he said. 'Northern Ireland may not be a region with the potential for a great deal more, because the Treasury could say "If you are raising more money yourselves, why do you need more money from us?".'
Farren disclosed that his party – the Social Democratic and Labour Party – had argued for tax-raising powers during the negotiations that led to devolution in Northern Ireland, but had been unsuccessful.
He believes that the Northern Ireland Executive requires an additional £4bn for the modernisation of services over the next five years, compared with its existing annual budget of £6bn.
Farren hopes to achieve this through a mixture of additional Treasury grant, new public-private partnerships and extra, local, revenue raising. This might be achieved via local income tax powers or by increasing the product of the regional rate, which is levied by the province's Executive.
The Executive might also ask for a relaxation of Whitehall's spending controls to allow it to increase expenditure through raising its own borrowing, possibly via the issuing of bonds.
PFmar2002
