Posted on Monday 25 March 2013 by Ulster Business

Coulter web

The chairman of CBI Northern Ireland has called on Prime Minister David Cameron to commit to the devolution of corporation tax when he meets the First and Deputy First Ministers in London tomorrow.

In a letter issued in advance of the meeting, scheduled to take place at Downing Street, Ian Coulter urged Mr Cameron to quit stalling on a decision to give Northern Ireland tax varying powers and "just say yes".

In the letter the CBI chairman writes: "Prime Minister, last year you set out your vision of a competitive, dynamic, creative Britain. You spoke of how frustrated you were by the hoops you have to jump through to get anything done. You expressed your determination to cut through the "dithering" that holds the country back. You spoke of your Government as being a radical government.

"We share your vision, and desire to get things done. We urge you to now put these words into action for Northern Ireland and give it the economic lever most likely to Rebalance the Northern Ireland economy."

The latest campaign to have the power to set corporation tax transferred to Stormont has been going on for almost three years. Advocates say that bringing the headline rate of corporation tax in line with the Republic's 12.5% rate would allow Northern Ireland to attract more foreign investment and help more indigenous firms invest in jobs and expansion.

Under EU law the Stormont Executive would have to accept a cut in the block grant received from Westminster equal to the amount of tax which would be lost by varying the corporate tax rate from the UK level – which Chancellor George Osborne last week lowered to 20%. How much this will cost has been the most contentious issue in discussions between Stormont and the Treasury but Mr Coulter said the time had come for the Prime Minister to put a final figure on it.

"Advocating continued dialogue, but giving no firm commitment on this issue, when you meet our Ministers on Tuesday, will create a real risk of this being seen as a potential frustration of the process," he wrote.

The CBI chairman urged Mr Cameron to "confirm that, subject to agreeing an affordable cost, the UK Government will give a clear commitment to the devolution of corporate tax powers to the Northern Ireland Executive" and also to "outline a provisional timetable for that cost to be finally concluded".

CBI said this should be completed before the "shop window" opportunity of the G8 Summit in Fermanagh arrives in June.

Business leaders have regularly stated that since the government's consultation paper two years ago they have made a cast iron case in favour of corporation tax devolution and pointed to the cross party support for the idea from local politicians.

Continuing to delay the decision could have a long lasting impact on the province's economy, the CBI chairman said.

Mr Coulter noted that in the last 30 months, over 35,000 jobs have been created in the Republic of Ireland through foreign direct investment, with more than 6,000 created since January.

He also stressed that unemployment levels in Northern Ireland are at a 15 year high, with both general and youth unemployment now higher than at the time of the Good Friday Agreement.

"Northern Ireland boasts many innovative businesses that are growing and flourishing, despite the challenges, and a skilled and dedicated workforce. But many more businesses and individuals are in dire straits and a generation of talented young people is being lost," he said.

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