Five-year wait for NI to gain corporation tax cut

Image caption,
Enterprise minister Arlene Foster gave evidence to the Northern Ireland Affairs Committee

Business leaders have told MPs that it could take five years for the NI economy to benefit from a reduction in corporation tax to below the rate in the Republic of Ireland.

Terence Brannigan, the chairman of the CBI in Northern Ireland, said there "was a risk" to setting a rate lower than the Irish rate of 12.5%.

But he said if a lower rate was introduced "within five years we would see major benefit".

He was joined by his CBI colleague Nigel Smyth, who also gave evidence to the Northern Ireland Affairs committee which is investigating corporation tax.

The Chancellor, George Osborne, plans to reduce the tax in the UK from 28% to 24% over the next four years.

Stormont ministers Arlene Foster and Sammy Wilson also gave evidence at Westminster.

Cost Concern

The Enterprise Trade and Investment Minster Arlene Foster said the actual cost of a tax cut was not known.

She told MPs that the Executive were awaiting information from the Treasury and this lack of detail was "holding us back".

The Finance Minister Sammy Wilson said there were real concerns about costs.

He told the committee "the lower you set the rate the bigger the bill will be".

He said since the cost of the tax cut affected the block grant "we could not afford a £2m to £3m hit".

Before the meeting Arlene Foster told the BBC that it was unlikely there would be any reduction in corporation tax before next year's Assembly election scheduled for May 2011.