By Vivienne Russell | 9 January 2015
Northern Ireland’s politicians have been told that they will be given control of corporation tax before May’s general election if they push on with agreeing the budget and implementing welfare reforms.
In a statement to MPs delivered on January 7, Northern Ireland Secretary Theresa Villiers said set out details on the Stormont House Agreement, which was struck on December 23 following weeks of talks.
The agreement paves the way for legislation to devolve corporation tax to Northern Ireland, as was announced in the Autumn Statement. The Corporation Tax (Northern Ireland) Bill was published yesterday.
‘If the Stormont parties press ahead on agreeing their final budget and on delivering welfare reform legislation, the government will use all its best endeavours to get the legislation on to the statute book before dissolutions,’ Villiers said.
‘The parties in Northern Ireland believe that corporation tax devolution can help them to rebalance the economy and attract investment because of Northern Ireland’s unique position of having a land border with the Republic of Ireland.’
Northern Ireland’s finance minister Simon Hamilton welcomed the bill’s publication, saying it would provide the vehicle to secure corporation tax rate setting powers for Northern Ireland.
‘These are powers that the Northern Ireland Executive has been seeking to secure for a considerable period of time. This will provide the Executive with a powerful lever to transform the Northern Ireland economy and place it on a significantly higher growth path.’
Currently, corporation tax in the UK is 21% compared to 12.5% in the Republic of Ireland.
The Stormont House Agreement also sets out a plan for the Northern Ireland Executive to put its finances on a sustainable footing, following last year’s budget crisis. Villiers said this had threatened the ‘stability and credibility’ of the devolved institutions.
The executive will be expected to introduce the government’s welfare reforms, with certain agreed adaptations paid for out of Northern Ireland’s block grant.
Wider public sector reforms are also included in the agreement, as well as improvements to the way the executive and assembly work, including the establishment of an official opposition and cuts to the number of government departments and the number of MLAs.
Under the agreement, the UK government has committed £150m over five years to fund structures dealing with the legacy of Northern Ireland’s troubled past. These include an Oral History Archive, a new Historical Investigations Unit, to look at deaths that occurred as a result of the Troubles, and an Independent Commission for Information Retrieval, which has been established by the UK and Irish Governments.
