Northern Ireland could have a new rate of corporation tax in effect by April 2017 if political leaders can pass the latest "test" in the peace process – the welfare reform crisis – a senior business leader warned in Belfast Thursday.
Paul Henry, chairman of the Chartered Accountants Ulster Society, said a cut in the rate of corporation tax will be an important catalyst for economic development and social change in Northern Ireland. But Mr Henry said there was no doubt that challenges still lay ahead.
“There are challenges ahead. Cuts and job losses in the public sector will begin to bite in the year ahead, while welfare reform, flags and parades are persistent difficulties, but progress is being made,” Mr Henry told guest sat the Ulster Society’s annual dinner in Belfast.
More than 350 members of the business community attended the event, including the former Northern Ireland secretary of state, Owen Paterson, who was also a guest speaker at the event.
Mr Henry said both the Ulster Society, and its parent Institute, Chartered Accountants Ireland, had long campaigned for a reduction in corporation tax levels which, he said, had the potential to drive investment and create sustainable jobs.
“It can be an important catalyst for development, just as it has been in the Republic of Ireland,” he added.
But the enthusiasm of the North’s business community to embrace a lower rate of corporation tax appears at odds with local political leaders’ ability to reach consensus on the issue of welfare reforms.
Without an agreement the Secretary of State Theresa Villiers has warned that the devolution of corporation could be in doubt. It is wholly dependent on political parties agreeing on a welfare bill.
The current impasse is likely to deflate next week’s St Patrick’s Day public relations campaign. The annual gathering at the White House had been envisaged as the perfect backdrop for political leaders to get the message out to potential new US investors about the new lower rate of corporation tax.
Now even the joint visit to the White House to meet President Obama is in doubt.
Earlier Thursday, a coalition of business leaders sent an open letter to the First and Deputy First Ministers urging political parties to come to “an urgent solution so that we can all move forward together”.
Business leaders from the Confederation of British Industry, the Institute of Directors, the Federation of Small Businesses and the Northern Ireland Chamber of Commerce said the problems over welfare reform had created yet “another crossroads” in the North’s progress towards a better future.
“The commitment of the business community to grow the private sector and create tens of thousands of jobs for everyone remains undimmed. However, delivery of lower Corporation Tax is fundamental to achieving these outcomes. Hence the reason to come together to speak with one voice on this matter.
“We strongly encourage our political parties to come to an urgent solution so that we can all move forward together,” they said in the letter.
