‘No plans’ for reduction of corporation tax in Northern Ireland – Murphy

There are no current plans to cut corporation tax in Northern Ireland, the Stormont Economy Minister has said.

Conor Murphy was speaking as he outlined his economic vision for the region in the remaining three years of the Assembly term.

There had previously been calls to cut the corporation tax rate in Northern Ireland in the hope of becoming more competitive as a place to invest.

As part of the Government’s recent Safeguarding the Union command paper, there is a commitment to work urgently to devolve corporation tax powers to Stormont.

But Mr Murphy told MLAs on Monday that it is “not something we’re rushing into”.

“The difficulty for us is that the Treasury’s approach to the devolution of taxation and particularly corporation tax is that they want the money upfront that they think it would yield – that comes directly from our public services,” he said.

“Our public services are so underfunded, and we are so underfunded in terms of our level of need, that I don’t think it’d be conscionable to try and denude them anymore of finance in order to hope for the benefit back that a lower corporation tax might mean … and you don’t have any guarantees in relation to what it would bring back.

“So I do think we have economic levers in terms of our approach to the policies we can set and we have to use them as best we can in the time ahead to try and grow the economy. I don’t see corporation tax playing any part in that any time soon.”

Mr Murphy’s plan is to prioritise creating good jobs, increasing productivity, achieving regional balance, and reducing carbon emissions in accordance with the legal requirement to reach net zero by 2050.

It will use the Windsor Framework to grow exports and attract more investment, and take “full advantage of the all-Ireland economy”.

Addressing the Assembly on Monday, Mr Murphy said it is important to be honest about the challenges, describing low employment rates, low productivity, low wages and regional imbalances as “having deep roots”, but said they “can be overcome”.

He told MLAs that while London retains control of a number of key levers, such as the regulation of financial services and fiscal policy, he said devolution provides “significant” control over business support, skills, innovation policy and employment law.

Mr Murphy also referred to the post-Brexit landscape, saying the Windsor Framework protects the all-Ireland economy, which he described as having “tremendous unrealised potential”.

Meanwhile, Invest NI will have a new regional structure dedicated to “home-grown small/medium enterprises and start-ups”.

“One objective is to create good jobs. Many workers and their families are denied a decent standard of living,” Mr Murphy told MLAs.

“We must change this by investing in affordable childcare and by strengthening trade unions, particularly in low-paid industries.

“Productivity is a fundamental driver of overall living standards. We can improve our productivity by using dual-market access to grow exports and attract highly productive investment.

“Investment in skills, research and development and innovation will also drive better productivity.

“My final, critical, objective is to reduce carbon emissions. Reaching net zero by 2050 is a legal requirement and a moral obligation to the wellbeing of future generations. Done right the transition can also generate prosperity for all.”

He added: “My department will move at pace to put this vision into action. Its focus will be on delivery. We have a lot of work to do to turn this economy around, and that work starts now.”

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