New evidence has emerged that potential overseas investors are “deferring, sometimes permanently” decisions about the North because of the uncertainty surrounding the timetable for lower corporation tax rates, a leading business collective has warned.
Grow NI, which represents all of the local leading business organisations and many key employers in the North, claims the failure of political leaders to agree the mechanism that would enable lower tax rates to be introduced is jeopardising new investment and in turn jobs in Northern Ireland.
Eamonn Donaghy, chair of Grow NI, the organisation which drove the campaign for Northern Ireland to secure the power to set its own corporation tax rate -said at risk was the "power to create tens of thousands of jobs".
“Continued uncertainly around a start date and an agreed rate of corporation tax means that the private sector cannot compete on a level playing field with businesses in the Republic of Ireland.
Tax powers
“Only by having the same rate of corporation tax across the island will we see any significant increase in employment in Northern Ireland. Such a change would see increased investment from companies at home and abroad, creating jobs which are much needed in communities everywhere,” Mr Donaghy said.
Under the terms of the Stormont House Agreement the devolution of corporation tax powers is inextricably linked to new welfare changes in the North.
But political parities have been unable to reach agreement on a welfare reform bill.
The Northern Ireland Secretary of State, Theresa Villiers, has repeatedly warned that if the deadlock over welfare reform cannot be resolved, it will jeopardise not only the transfer of powers over corporation tax but also an additional £2 billion of spending power pledged as part of the agreement.
Mr Donaghy said the business community wants political leaders to “seize the opportunity” that a lower rate of corporation tax could create.
Certainty
Business development agency Invest NI said that although it is currently making potential investors “aware of the proposed devolution of corporation tax power, it is not using it as an “active sales tool” until a date of implementation has been agreed and a rate has been set.
“Potential investors have expressed that it would be helpful to have certainty on the rate and date, but investment discussions continue to focus on the talent and other competitive advantages that Northern Ireland can offer their project plans,” a spokeswoman from Invest NI said.
The Confederation of British Industry (CBI) in the North has said that nobody in the business community underestimates the difficulties that the Executive and political leaders face at this time.
