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Corporation Tax

Volume 566: debated on Wednesday 10 July 2013

We recognise the potential benefits of devolving corporation tax in Northern Ireland. We are continuing to consider the technical and financial implications of such a change, and will make a decision no later than the 2014 autumn statement on whether to devolve rate-setting powers.

There remains significant concern in Northern Ireland about the reduction in the block grant should the rate of corporation tax be equalised with the south. What discussions has the Secretary of State had with the Chancellor and the Northern Ireland Finance Minister about the consequences for the block grant, and by how much would it reduce if corporation tax were equalised with the south?

I have had extensive discussions on that matter on a number of occasions with the Northern Ireland Finance Minister and Treasury Ministers, including the Chancellor, and that issue is one reason why we must consider carefully before deciding whether to go ahead with the change. We must ensure that the numbers are correct and that we have thought through all the consequences before a decision is made on whether the devolution should take place.

In answer to an earlier question the Secretary of State mentioned her determination to rebalance the Northern Ireland economy. Given that any decision on corporation tax is at least 17 months away, what other weapons will she help to provide in the armoury of the Northern Ireland Executive to help inward investment in our private sector?

We have already started on that work by bringing the G8 to Northern Ireland to demonstrate what a fabulous place it is to do business. We have also agreed an extensive economic package with the First and Deputy First Ministers, with extra funding for PEACE IV, extra structural funds and the retention of 100% assisted area status, which has enabled the Northern Ireland Executive to create 3,000 new jobs in the past three months alone.