Following the comments from Chancellor George Osborne that he wants the UK to reduce Corporation Tax to less than 15% as part of a plan to build a “super-competitive economy”, Ulster Unionist Finance Spokesperson Philip Smith has called on the NI Executive to clarify their position on this key economic policy.

Philip Smith MLA said:

“Corporation Tax is now devolved to the NI Assembly and we have agreement from Westminster to reduce our rate to 12.5% by 2018. Therefore, there is a danger in light of the Chancellor’s comments, that he may jump ahead of us and reduce the rate of Corporation Tax for the rest of the UK in the Autumn budget. I would hope that Northern Ireland’s rate would similarly fall if that were the case and I call on the Finance Minister to confirm this, otherwise we will be squeezed between a 12.5% rate in the Republic and a new lower rate in the rest of the United Kingdom.

“Even if we follow the GB rate immediately, our core economic policy, our main lever to build competitive advantage, is lost. This of course is compounded by the uncertainty of a post Brexit world where we don’t know what our future access will be to the European Single Market.  There is uncertainty about our future border arrangements with the Republic; there is uncertainty about what potential tariffs the bulk of our exports which go to EU countries will face and there is uncertainty about the future arrangements relating to freedom of movement for employees.

“In any case, this is a policy failure from the NI Executive. They have diminished the value of Northern Ireland’s main economic development policy by displaying an inability to stick to an agreed position.  The NI Executive has sat on the Corporation Tax policy for years after the Ulster Unionist Party first committed to this in our 2010 manifesto. The Executive’s prevarication has resulted in a potential own goal for the Northern Ireland economy.

“The Chancellor’s announcement comes on the back of Theresa Villiers contradicting the First Minister Arlene Foster on the Brexit implications for the Azores Ruling. The First Minister stated that Northern Ireland would no longer be required to cover the cut in Corporation Tax revenues with a corresponding reduction to the Block Grant. The Secretary of State flatly refuted this statement. It appears that neither have a clue about the future of Corporation Tax here or in the rest of the country.”

“The Ulster Unionist Party is extremely concerned about the lack of a discernible economic strategy for Northern Ireland. The business community is fearful of the future outworking of Brexit on our local economy and the DUP and Sinn Fein appear to be on their holidays. That is why the Ulster Unionist Party is starting a consultation process this week to develop an Opposition Plan for the Northern Ireland economy and to inform the future EU negotiations.”