The pledge by British prime minister David Cameron after returning to Downing Street to devolve corporation tax power to the Northern Ireland Executive has been welcomed by the North's business community.

The recommitment to “stay true to his word” on the issue was highlighted as a key part of his plan to ensure that the economic recovery “reaches all parts” of the UK.

Eamonn Donaghy from Grow NI – the organisation that campaigned for the devolution of corporation tax to the NI Assembly – said Mr Cameron's intention to remain on the same path as before is crucial.

But Mr Donaghy, who is head of tax at KPMG Belfast, said there was an onus on the Northern Ireland Executive to deliver on its side of the bargain. The devolution of corporation tax-setting powers is entirely dependent on local political leaders striking a deal to implement welfare reform legislation and agree a budget.

Pro-enterprise environment

Nigel Smyth

, CBI Northern Ireland director, also welcomed Mr Cameron’s commitment.

“The Government must create a pro-enterprise environment, by getting the deficit down, continuing to make the UK one of the most competitive tax environments in the G20, especially for medium-sized businesses, and backing the decision of the Airports Commission, which has an impact on Northern Ireland’s air connectivity.”

The Northern Ireland Chamber of Commerce also believes the prospect of a referendum on whether the UK should remain part of the EU could prove unsettling for some local businesses.

Richard Ramsey, chief economist of Ulster Bank, says it is time for local politicians to take difficult decisions on the economy.

“There are significant welfare cuts looming post-election and while the general election may have temporarily stalled the process in Northern Ireland, a deal on welfare reform and the local budget have yet to be agreed.”