The cut in UK corporation tax announced in today's budget comes as politicians close in on a deal to devolve the power to Northern Ireland.

Northern Ireland Secretary Owen Paterson said the decision of chancellor George Osborne to cut the tax to 22 per cent by 2014 could help the argument for reducing the rate in Northern Ireland.

The Government has gradually brought the rate down from 28 per cent, with the chancellor pledging to eventually drop it to 20 per cent.

Mr Paterson said this effectively narrows the gap needed to be bridged to meet the ambitions of Stormont politicians.

Northern Ireland leaders want to see the region’s rate dropped to narrow the gap with the 12 per cent level here.

Mr Paterson, who has pressed for the reform as a means of boosting the private sector, said officials were involved in detailed discussions on the cost of any change, how a new system might be administered, plus the best legal framework for any reform.

“There is no final decision,” he said. “I hope the ministerial working group will finish its work by the summer so we are in a position to make a decision then.”

He added: “The reduction in corporation tax to 22 per cent by 2014 will be a real help to Northern Ireland in encouraging the private sector and seeking international inward investment. At the same time, we are continuing to work intensively through options for devolving corporation tax to Northern Ireland.”

This came as Mr Paterson hailed the Budget as good news for Northern Ireland.

“The measures announced today provide really significant help to hard-working families in Northern Ireland,” he said.

“The increase in income tax personal allowances by a further £1,100 in April 2013 - the largest in 30 years - will

benefit 605,000 people in Northern Ireland.” He said thousands would be taken out of the income tax range.

Mr Paterson said: “In addition, raising the individual threshold for the withdrawal of child benefit to £50,000 will benefit 16,000 households in Northern Ireland.”

He said tax relief for high-end TV production would boost Northern Ireland’s burgeoning creative industries.

But Nipsa, the largest public service trade union, attacked the Budget, branding it a package compiled “for and by the rich”.

General secretary Brian Campfield said: “There has been much spin and selective leaks highlighting the alteration of

personal tax thresholds in terms of the point at which tax is paid but the real signal of who this Budget is written for is the disgraceful decision to lower the top rate of tax for those currently paying the 50p rate.

“This group receive a minimum of £150,000 a year and the top tenth of this group have starting pay of £22,670 a week - 60 times the current UK median pay of £380 a week.”

He said government should address London “being the tax avoidance capital of the world with #123 billion currently avoided, evaded or uncollected in the UK”.

Health charities and businesses were at odds over the change to cigarette pricing. Retailers hit out at the 37p increase on a packet of 20 cigarettes.

Northern Ireland spokesman for the Tobacco Retailers Alliance and Ballymena shopkeeper John McKeown said: “All this will do is increase the appeal of buying from smugglers who can charge half of what I do in the shop.”

But the Ulster Cancer Foundation (UCF) welcomed the rise.

Gerry McElwee, head of cancer prevention UCF, said: “This is excellent news. We are delighted that the Chancellor has listened to the voices of the health community and taken decisive action to tackle the greatest single cause of ill health and premature death.

“Increase in tobacco taxation is the most effective way of encouraging smokers to quit.”

PA