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Corporation Tax

Volume 604: debated on Wednesday 20 January 2016

3. What progress has been made on implementation of the proposed reduction in corporation tax in Northern Ireland. (903077)

The fresh start agreement reaffirmed the Government’s support for devolution of corporation tax powers, so long as the Executive are able to demonstrate that their finances are on a long-term sustainable footing.

Does my right hon. Friend agree that when tens of thousands of additional jobs and increased productivity and economic output over the medium and long term are at stake, we must not squander that opportunity?

I fully agree that the devolution of corporation tax to Northern Ireland provides huge opportunities to attract new business and inward investment and to boost the economy. My hon. Friend is right, however, that it needs to be accompanied by broader economic reform, such as a focus on skills, universities and infrastructure.

While the devolution of corporation tax will be important in growing the Northern Ireland economy, does the Secretary of State agree that a vote to leave the EU would help the Northern Ireland economy insofar as it would release £18 billion every year for expenditure on public services, enable us to enter a trade agreement with growing parts of the world and release us from the stifling bureaucracies of Europe?

I am afraid that the hon. Gentleman is tempting me to engage in arguments which will rightly be a matter for everyone in the country when they have an opportunity to vote in the referendum. We promised a referendum in our manifesto, and that is what we are going to deliver.

Does the Secretary of State agree that existing cuts in university funding, followed by further cuts, and a consequent significant reduction in the number of graduates who are suitably qualified to become employees of the inward investment companies that we are trying to attract, will frustrate much of the benefit that is expected from the reduction in corporation tax?

There is no doubt that the Northern Ireland Executive face difficult decisions, as do all Governments at a time when budgets are constrained. I believe it is important to focus on crucial economic areas such as skills, university and infrastructure. Perhaps there is a debate to be had about the way in which higher education is funded in Northern Ireland, but that, of course, is a devolved matter for devolved representatives.