Corporation tax in NI: Reaction to chancellor's statement

The chancellor made the announcement in the House of Commons as part of his Autumn Statement

The political parties and business groups have been giving their reaction to news that any decision on devolving corporation tax to Northern Ireland will be dependent on the outcome of the all-party talks.

Chancellor George Osborne said the power could be devolved provided the Northern Ireland Executive can show that it is "able to manage the financial implications".

Ivan Lewis MP, Shadow Secretary of State for Northern Ireland

"We acknowledge that devolution of corporation tax could play an important role in achieving these objectives.

"However, it will also require Northern Ireland's politicians to trade off any potential corporation tax reductions with severe cuts to existing public expenditure, and potentially give Northern Ireland a very different business tax environment to the rest of the United Kingdom.

"We support the government's position that as part of the current all-party talks, Northern Ireland's political leaders must agree a viable and sustainable budget.

"However, it is also important that there is proper consideration of long term as well as short term implications. Labour will consult widely before reaching a decision on whether or not to support devolution of corporation tax."

Finance Minister Simon Hamilton

"I welcome the commitment by the chancellor to devolve corporation tax, subject to appropriate progress and financial commitment in the talks process.

"Our persistence, along with the local business community, to reduce corporation tax for Northern Ireland has paid dividends but other parties must now step up and show leadership on budget and welfare reform if the prize of corporation tax is to be secured.

"Reducing the rate of corporation tax will help to rebalance our economy by providing locally based businesses with the additional incentive to re-invest while also making Northern Ireland an attractive location for new foreign direct investment."

Danske Bank's chief economist Angela McGowan

"The Autumn Statement was a huge disappointment for Northern Ireland.

"Other than a brief reference to the possibility of devolving corporation tax "if the conditions are right" there was very little by way of support or initiatives to really boost our long-term economic growth prospects.

"The coalition government has committed massive amounts of money to cement the north of England as a world leader in science and technology.

"We heard about numerous new initiatives such as the new £28m high value added manufacturing catapult centre for Sedgefield and the £20m Innovation Hub for Ageing Science in Newcastle.

"But nothing of that nature was made available for the Northern Ireland economy."

Daithí McKay, Sinn Féin

"Sinn Féin will not be taking any lectures from George Osborne, the architect of the most vicious attack on public services since the inception of the welfare state.

"Many people in Britain, including churches, trade unionists and charities are hugely critical of the Tory government's management of the British economy.

"Many of them have urged us not to follow the destructive policies of Cameron's cabinet of Tory millionaires.

"Sinn Féin has argued for the transfer of all fiscal powers to the north including the power to set corporation tax.

"And we need to carefully consider what we would do with that power, whether we would reduce it or not and if so by how much.

"And of course, this issue cannot be seen in isolation from the very real financial pressures we as an Executive are currently facing - pressures largely created by the year-on-year cuts to the Executive's budget implemented by George Osborne. "

Kevin Kingston, Northern Ireland Chamber of Commerce and Industry

"NI Chamber welcomes today's announcement on the devolution of corporation tax powers to the Northern Ireland Executive.

"The prime minister has listened to calls from the business community and all of Northern Ireland's political parties for the devolution of powers, with the outcome now placed firmly on the Northern Ireland Executive's willingness to cooperate on a number of issues which have challenged them.

"With the powers now sitting firmly in our hands, our politicians must grasp this opportunity whilst using the two years prior to the implementation of the new tax rate to ensure that we maximise the opportunity."

Danny Kinahan, Ulster Unionist Party

"I welcome the chancellor's announcement to devolve corporation tax in principle to the Northern Ireland Executive.

"I also welcome his commitment elsewhere in the Autumn Statement to do more to ensure all businesses pay all tax due.

"The devolution of corporation tax has been tied to a successful outcome of the current talks process being chaired by the secretary of state.

"The Ulster Unionist Party remains fully engaged in that process, and focused on the need for the Northern Ireland Executive to balance its books.

"We cannot go on saddling future generations with massive debt because we are living so far beyond our means."

Jim Allister, TUV leader

"If the chancellor means what he says, corporation tax devolution should be off the table for the foreseeable future as Stormont has patently failed to manage its financial affairs.

"Scrambling together a deal for the optics hardly meets that test.

"However, I suspect that, in truth, corporation tax will come to Stormont if unionists roll over in the current talks. But corporation tax is a poisoned carrot about which we should be wary.

"Firstly, under EU law any cut in corporation tax will mean a corresponding cut to the block grant.

"Estimates of the cost vary, but it will be hundreds of millions of pounds annually.

"In return the best that can be expressed is an opaque hope of extra investment, rather than the corporations pocketing the windfall tax savings."

Patsy McGlone, SDLP

"This is a power which the executive parties all agree should be devolved, the British Treasury has agreed that it could be devolved and yet the chancellor is basing it on the outcome of the talks which he will now judge.

"The devolution of this power must be handled carefully.

"It has the potential to be an economically enhancing measure but only if the right infrastructure and support is in place.

"It is also important that the British government recognises the fragile state of the Northern Ireland economy and the devastating impact further cuts to the block grant would have.

"They must look at placing a comfort package in place to make the transition to handling corporation tax powers viable for both the Treasury and the executive.

"While the British government may try to use this as a bargaining chip in the talks, it is important that all parties refuse to be strong armed by the Tories into making concessions that are not in the best interests of people here.

"The talks outcome should be comprehensive, decisive but most of all should meet the needs of the people we represent, not the desires of an austere chancellor in London."